Correlation Between DigitalOcean Holdings and Akamai Technologies

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

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

Diversification Opportunities for DigitalOcean Holdings and Akamai Technologies

-0.15

Correlation Coefficient

DigitalOcean Holdings  Akamai Technologies

Good diversification

The 3 months correlation between DigitalOcean and Akamai is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding DigitalOcean Holdings and Akamai Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akamai Technologies 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 Akamai Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akamai Technologies has no effect on the direction of DigitalOcean Holdings i.e., DigitalOcean Holdings and Akamai Technologies go up and down completely randomly.

Pair Corralation between DigitalOcean Holdings and Akamai Technologies

Given the investment horizon of 90 days DigitalOcean Holdings is expected to generate 2.32 times more return on investment than Akamai Technologies. However, DigitalOcean Holdings is 2.32 times more volatile than Akamai Technologies. It trades about 0.08 of its potential returns per unit of risk. Akamai Technologies is currently generating about -0.1 per unit of risk. If you would invest  3,871  in DigitalOcean Holdings on August 3, 2025 and sell it today you would earn a total of  195.00  from holding DigitalOcean Holdings or generate 5.04% return on investment over 90 days.

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

DigitalOcean Holdings  vs.  Akamai Technologies

DigitalOcean Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DigitalOcean Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, DigitalOcean Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Akamai Technologies

Risk-Adjusted Performance

Weakest

Over the last 90 days Akamai Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Akamai Technologies 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 Akamai Technologies

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

The idea behind DigitalOcean Holdings and Akamai Technologies 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.