Correlation Between DigitalOcean Holdings and Repligen

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

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

Diversification Opportunities for DigitalOcean Holdings and Repligen

0.32

Correlation Coefficient

DigitalOcean Holdings  Repligen

Weak diversification

The 3 months correlation between DigitalOcean and Repligen is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding DigitalOcean Holdings and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen 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 Repligen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repligen has no effect on the direction of DigitalOcean Holdings i.e., DigitalOcean Holdings and Repligen go up and down completely randomly.

Pair Corralation between DigitalOcean Holdings and Repligen

Given the investment horizon of 90 days DigitalOcean Holdings is expected to generate 1.05 times more return on investment than Repligen. However, DigitalOcean Holdings is 1.05 times more volatile than Repligen. It trades about 0.04 of its potential returns per unit of risk. Repligen is currently generating about 0.0 per unit of risk. If you would invest  3,593  in DigitalOcean Holdings on December 25, 2024 and sell it today you would earn a total of  204.00  from holding DigitalOcean Holdings or generate 5.68% return on investment over 90 days.

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

DigitalOcean Holdings  vs.  Repligen

DigitalOcean Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DigitalOcean Holdings are ranked lower than 3 (%) 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.

Repligen

Risk-Adjusted Performance

Weak

Over the last 90 days Repligen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Repligen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with DigitalOcean Holdings and Repligen

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

The idea behind DigitalOcean Holdings and Repligen 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.