Correlation Between DigitalOcean Holdings and Remitly Global

Can any of the company-specific risk be diversified away by investing in both DigitalOcean Holdings and Remitly Global 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 DigitalOcean Holdings and Remitly Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DigitalOcean Holdings and Remitly Global, you can compare the effects of market volatilities on DigitalOcean Holdings and Remitly Global 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 DigitalOcean Holdings with a short position of Remitly Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigitalOcean Holdings and Remitly Global.

Diversification Opportunities for DigitalOcean Holdings and Remitly Global

0.59

Correlation Coefficient

DigitalOcean Holdings  Remitly Global

Very weak diversification

The 3 months correlation between DigitalOcean and Remitly is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding DigitalOcean Holdings and Remitly Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remitly Global and DigitalOcean 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 DigitalOcean Holdings are associated (or correlated) with Remitly Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remitly Global has no effect on the direction of DigitalOcean Holdings i.e., DigitalOcean Holdings and Remitly Global go up and down completely randomly.

Pair Corralation between DigitalOcean Holdings and Remitly Global

Given the investment horizon of 90 days DigitalOcean Holdings is expected to generate 1.35 times less return on investment than Remitly Global. In addition to that, DigitalOcean Holdings is 1.48 times more volatile than Remitly Global. It trades about 0.06 of its total potential returns per unit of risk. Remitly Global is currently generating about 0.12 per unit of volatility. If you would invest  2,075  in Remitly Global on December 1, 2024 and sell it today you would earn a total of  325.00  from holding Remitly Global or generate 15.66% return on investment over 90 days.

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

DigitalOcean Holdings  vs.  Remitly Global

DigitalOcean Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DigitalOcean Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, DigitalOcean Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Remitly Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Remitly Global are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Remitly Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DigitalOcean Holdings and Remitly Global

The main advantage of trading using opposite DigitalOcean Holdings and Remitly Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DigitalOcean Holdings position performs unexpectedly, Remitly Global 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 Remitly Global will offset losses from the drop in Remitly Global's long position.

The idea behind DigitalOcean Holdings and Remitly Global 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.