Correlation Between Made Tech and Datadog

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

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

Diversification Opportunities for Made Tech and Datadog

-0.87

Correlation Coefficient

Made Tech  Datadog

Pay attention - limited upside

The 3 months correlation between Made and Datadog is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and Datadog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datadog and Made Tech 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 Made Tech Group 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 Made Tech i.e., Made Tech and Datadog go up and down completely randomly.

Pair Corralation between Made Tech and Datadog

Assuming the 90 days trading horizon Made Tech Group is expected to under-perform the Datadog. But the stock apears to be less risky and, when comparing its historical volatility, Made Tech Group is 1.43 times less risky than Datadog. The stock trades about -0.18 of its potential returns per unit of risk. The Datadog is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  12,907  in Datadog on August 18, 2025 and sell it today you would earn a total of  5,594  from holding Datadog or generate 43.34% return on investment over 90 days.

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

Made Tech Group  vs.  Datadog

Made Tech Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Made Tech Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Datadog

Risk-Adjusted Performance

Good

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

Pair Trading with Made Tech and Datadog

The main advantage of trading using opposite Made Tech and Datadog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech 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 Made Tech Group 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.