Correlation Between HubSpot and Datadog

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

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

Diversification Opportunities for HubSpot and Datadog

-0.39

Correlation Coefficient

HubSpot  Datadog

Very good diversification

The 3 months correlation between HubSpot and Datadog is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding HubSpot and Datadog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datadog and HubSpot 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 HubSpot 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 HubSpot i.e., HubSpot and Datadog go up and down completely randomly.

Pair Corralation between HubSpot and Datadog

Given the investment horizon of 90 days HubSpot is expected to under-perform the Datadog. In addition to that, HubSpot is 1.01 times more volatile than Datadog. It trades about -0.01 of its total potential returns per unit of risk. Datadog is currently generating about 0.28 per unit of volatility. If you would invest  9,458  in Datadog on April 23, 2025 and sell it today you would earn a total of  5,069  from holding Datadog or generate 53.59% return on investment over 90 days.

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

HubSpot  vs.  Datadog

HubSpot

Risk-Adjusted Performance

Very Weak

Over the last 90 days HubSpot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, HubSpot is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Datadog

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Datadog are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Datadog reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HubSpot and Datadog

The main advantage of trading using opposite HubSpot and Datadog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HubSpot 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 HubSpot 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.