Correlation Between ChargePoint Holdings and Digi International

Can any of the company-specific risk be diversified away by investing in both ChargePoint Holdings and Digi International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ChargePoint Holdings and Digi International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ChargePoint Holdings and Digi International, you can compare the effects of market volatilities on ChargePoint Holdings and Digi International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ChargePoint Holdings with a short position of Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChargePoint Holdings and Digi International.

Diversification Opportunities for ChargePoint Holdings and Digi International

-0.05

Correlation Coefficient

ChargePoint Holdings  Digi International

Good diversification

The 3 months correlation between ChargePoint and Digi is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ChargePoint Holdings and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International and ChargePoint Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ChargePoint Holdings are associated (or correlated) with Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of ChargePoint Holdings i.e., ChargePoint Holdings and Digi International go up and down completely randomly.

Pair Corralation between ChargePoint Holdings and Digi International

Given the investment horizon of 90 days ChargePoint Holdings is expected to under-perform the Digi International. In addition to that, ChargePoint Holdings is 1.73 times more volatile than Digi International. It trades about -0.15 of its total potential returns per unit of risk. Digi International is currently generating about -0.01 per unit of volatility. If you would invest  3,079  in Digi International on December 26, 2024 and sell it today you would lose (124.00) from holding Digi International or give up 4.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ChargePoint Holdings  vs.  Digi International

ChargePoint Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Digi International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digi International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Digi International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ChargePoint Holdings and Digi International

The main advantage of trading using opposite ChargePoint Holdings and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChargePoint Holdings position performs unexpectedly, Digi International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Digi International will offset losses from the drop in Digi International's long position.

The idea behind ChargePoint Holdings and Digi International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.