Correlation Between DigitalOcean Holdings and Marqeta

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

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

Diversification Opportunities for DigitalOcean Holdings and Marqeta

0.55

Correlation Coefficient

DigitalOcean Holdings  Marqeta

Very weak diversification

The 3 months correlation between DigitalOcean and Marqeta is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding DigitalOcean Holdings and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta 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 Marqeta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marqeta has no effect on the direction of DigitalOcean Holdings i.e., DigitalOcean Holdings and Marqeta go up and down completely randomly.

Pair Corralation between DigitalOcean Holdings and Marqeta

Given the investment horizon of 90 days DigitalOcean Holdings is expected to under-perform the Marqeta. In addition to that, DigitalOcean Holdings is 1.15 times more volatile than Marqeta. It trades about -0.15 of its total potential returns per unit of risk. Marqeta is currently generating about -0.12 per unit of volatility. If you would invest  388.00  in Marqeta on September 28, 2024 and sell it today you would lose (23.00) from holding Marqeta or give up 5.93% of portfolio value over 90 days.

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

DigitalOcean Holdings  vs.  Marqeta

DigitalOcean Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DigitalOcean Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Marqeta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marqeta has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with DigitalOcean Holdings and Marqeta

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

The idea behind DigitalOcean Holdings and Marqeta 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 CEOs Directory module to screen CEOs from public companies around the world.