Correlation Between Datadog and Anheuser-Busch InBev

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

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

Diversification Opportunities for Datadog and Anheuser-Busch InBev

-0.67

Correlation Coefficient

Datadog  Anheuser-Busch InBev

Excellent diversification

The 3 months correlation between Datadog and Anheuser-Busch is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Datadog and Anheuser Busch InBev SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch InBev 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 Anheuser-Busch InBev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch InBev has no effect on the direction of Datadog i.e., Datadog and Anheuser-Busch InBev go up and down completely randomly.

Pair Corralation between Datadog and Anheuser-Busch InBev

Assuming the 90 days horizon Datadog is expected to under-perform the Anheuser-Busch InBev. In addition to that, Datadog is 1.45 times more volatile than Anheuser Busch InBev SANV. It trades about -0.27 of its total potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about 0.19 per unit of volatility. If you would invest  4,815  in Anheuser Busch InBev SANV on December 22, 2024 and sell it today you would earn a total of  985.00  from holding Anheuser Busch InBev SANV or generate 20.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Datadog  vs.  Anheuser Busch InBev SANV

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Anheuser Busch InBev

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anheuser Busch InBev SANV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Anheuser-Busch InBev unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Datadog and Anheuser-Busch InBev

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

The idea behind Datadog and Anheuser Busch InBev SANV 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 Commodity Directory module to find actively traded commodities issued by global exchanges.