Correlation Between Datadog and Greentown Management

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

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

Diversification Opportunities for Datadog and Greentown Management

0.56

Correlation Coefficient

Datadog  Greentown Management

Very weak diversification

The 3 months correlation between Datadog and Greentown is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Datadog and Greentown Management Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greentown Management 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 Greentown Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greentown Management has no effect on the direction of Datadog i.e., Datadog and Greentown Management go up and down completely randomly.

Pair Corralation between Datadog and Greentown Management

Given the investment horizon of 90 days Datadog is expected to generate 3.47 times more return on investment than Greentown Management. However, Datadog is 3.47 times more volatile than Greentown Management Holdings. It trades about 0.08 of its potential returns per unit of risk. Greentown Management Holdings is currently generating about 0.12 per unit of risk. If you would invest  11,760  in Datadog on May 26, 2025 and sell it today you would earn a total of  1,362  from holding Datadog or generate 11.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Datadog  vs.  Greentown Management Holdings

Datadog

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Datadog are ranked lower than 6 (%) 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.

Greentown Management

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Greentown Management Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Greentown Management is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Datadog and Greentown Management

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

The idea behind Datadog and Greentown Management Holdings 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.