Correlation Between Datadog and AGF Management

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

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

Diversification Opportunities for Datadog and AGF Management

0.89

Correlation Coefficient

Datadog  AGF Management

Very poor diversification

The 3 months correlation between Datadog and AGF is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Datadog and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management 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 AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of Datadog i.e., Datadog and AGF Management go up and down completely randomly.

Pair Corralation between Datadog and AGF Management

Assuming the 90 days horizon Datadog is expected to generate 1.42 times more return on investment than AGF Management. However, Datadog is 1.42 times more volatile than AGF Management Limited. It trades about 0.19 of its potential returns per unit of risk. AGF Management Limited is currently generating about 0.18 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 Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Datadog  vs.  AGF Management Limited

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.

AGF Management

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, AGF Management reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Datadog and AGF Management

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

The idea behind Datadog and AGF Management Limited 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.