Correlation Between Datadog and SentinelOne

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

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

Diversification Opportunities for Datadog and SentinelOne

-0.18

Correlation Coefficient

Datadog  SentinelOne

Good diversification

The 3 months correlation between Datadog and SentinelOne is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Datadog and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne 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 SentinelOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SentinelOne has no effect on the direction of Datadog i.e., Datadog and SentinelOne go up and down completely randomly.

Pair Corralation between Datadog and SentinelOne

Given the investment horizon of 90 days Datadog is expected to generate 0.97 times more return on investment than SentinelOne. However, Datadog is 1.04 times less risky than SentinelOne. It trades about 0.07 of its potential returns per unit of risk. SentinelOne is currently generating about -0.1 per unit of risk. If you would invest  11,714  in Datadog on May 15, 2025 and sell it today you would earn a total of  1,182  from holding Datadog or generate 10.09% return on investment over 90 days.

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

Datadog  vs.  SentinelOne

Datadog

Risk-Adjusted Performance

Soft

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 unsteady basic indicators, Datadog may actually be approaching a critical reversion point that can send shares even higher in September 2025.

SentinelOne

Risk-Adjusted Performance

Weakest

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

Pair Trading with Datadog and SentinelOne

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

The idea behind Datadog and SentinelOne 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.