Correlation Between Datadog and Jfrog

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

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

Diversification Opportunities for Datadog and Jfrog

0.74

Correlation Coefficient

Datadog  Jfrog

Poor diversification

The 3 months correlation between Datadog and Jfrog is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Datadog and Jfrog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jfrog 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 Jfrog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jfrog has no effect on the direction of Datadog i.e., Datadog and Jfrog go up and down completely randomly.

Pair Corralation between Datadog and Jfrog

Given the investment horizon of 90 days Datadog is expected to under-perform the Jfrog. In addition to that, Datadog is 1.07 times more volatile than Jfrog. It trades about 0.0 of its total potential returns per unit of risk. Jfrog is currently generating about 0.12 per unit of volatility. If you would invest  3,016  in Jfrog on February 15, 2025 and sell it today you would earn a total of  1,295  from holding Jfrog or generate 42.94% return on investment over 90 days.

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

Datadog  vs.  Jfrog

Datadog

Risk-Adjusted Performance

Very Weak

Over the last 90 days Datadog has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Jfrog

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jfrog are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Jfrog may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with Datadog and Jfrog

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

The idea behind Datadog and Jfrog 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.