Correlation Between Identiv and Datadog

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

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

Diversification Opportunities for Identiv and Datadog

-0.28

Correlation Coefficient

Identiv  Datadog

Very good diversification

The 3 months correlation between Identiv and Datadog is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Datadog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datadog and Identiv 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 Identiv are associated (or correlated) with Datadog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datadog has no effect on the direction of Identiv i.e., Identiv and Datadog go up and down completely randomly.

Pair Corralation between Identiv and Datadog

Assuming the 90 days trading horizon Identiv is expected to generate 1.56 times less return on investment than Datadog. But when comparing it to its historical volatility, Identiv is 1.9 times less risky than Datadog. It trades about 0.17 of its potential returns per unit of risk. Datadog is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  10,360  in Datadog on April 14, 2025 and sell it today you would earn a total of  1,334  from holding Datadog or generate 12.88% return on investment over 90 days.

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

Identiv  vs.  Datadog

Identiv

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Identiv may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Datadog

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Datadog are ranked lower than 14 (%) 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.

Pair Trading with Identiv and Datadog

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

The idea behind Identiv and Datadog 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.