Correlation Between Datadog and Fastly

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

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

Diversification Opportunities for Datadog and Fastly

-0.44

Correlation Coefficient

Datadog  Fastly

Very good diversification

The 3 months correlation between Datadog and Fastly is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Datadog and Fastly Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastly Inc 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 Fastly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastly Inc has no effect on the direction of Datadog i.e., Datadog and Fastly go up and down completely randomly.

Pair Corralation between Datadog and Fastly

Given the investment horizon of 90 days Datadog is expected to generate 0.76 times more return on investment than Fastly. However, Datadog is 1.32 times less risky than Fastly. It trades about 0.07 of its potential returns per unit of risk. Fastly Inc is currently generating about 0.02 per unit of risk. If you would invest  11,760  in Datadog on May 25, 2025 and sell it today you would earn a total of  1,155  from holding Datadog or generate 9.82% return on investment over 90 days.

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

Datadog  vs.  Fastly Inc

Datadog

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Datadog are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Datadog may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Fastly Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fastly Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Fastly is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Datadog and Fastly

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

The idea behind Datadog and Fastly Inc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.