Correlation Between MAG SILVER and Datadog

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

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

Diversification Opportunities for MAG SILVER and Datadog

0.81

Correlation Coefficient

MAG SILVER  Datadog

Very poor diversification

The 3 months correlation between MAG and Datadog is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and Datadog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datadog and MAG SILVER 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 MAG SILVER 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 MAG SILVER i.e., MAG SILVER and Datadog go up and down completely randomly.

Pair Corralation between MAG SILVER and Datadog

Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.15 times less return on investment than Datadog. In addition to that, MAG SILVER is 1.01 times more volatile than Datadog. It trades about 0.17 of its total potential returns per unit of risk. Datadog is currently generating about 0.19 per unit of volatility. 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

MAG SILVER  vs.  Datadog

MAG SILVER

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MAG SILVER are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, MAG SILVER unveiled solid returns over the last few months and may actually be approaching a breakup point.

Datadog

Risk-Adjusted Performance

Solid

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.

Pair Trading with MAG SILVER and Datadog

The main advantage of trading using opposite MAG SILVER and Datadog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER 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 MAG SILVER 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.