Correlation Between Datadog and Apollo Medical

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

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

Diversification Opportunities for Datadog and Apollo Medical

-0.76

Correlation Coefficient

Datadog  Apollo Medical

Pay attention - limited upside

The 3 months correlation between Datadog and Apollo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Datadog and Apollo Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Medical Holdings and Datadog 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 Datadog are associated (or correlated) with Apollo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Medical Holdings has no effect on the direction of Datadog i.e., Datadog and Apollo Medical go up and down completely randomly.

Pair Corralation between Datadog and Apollo Medical

Assuming the 90 days horizon Datadog is expected to generate 1.02 times more return on investment than Apollo Medical. However, Datadog is 1.02 times more volatile than Apollo Medical Holdings. It trades about 0.19 of its potential returns per unit of risk. Apollo Medical Holdings is currently generating about -0.15 per unit of risk. If you would invest  8,706  in Datadog on April 24, 2025 and sell it today you would earn a total of  3,700  from holding Datadog or generate 42.5% return on investment over 90 days.

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

Datadog  vs.  Apollo Medical Holdings

Datadog

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Datadog are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Datadog reported solid returns over the last few months and may actually be approaching a breakup point.

Apollo Medical Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apollo Medical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Datadog and Apollo Medical

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

The idea behind Datadog and Apollo Medical Holdings 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.