Correlation Between Datadog and Kulicke

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

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

Diversification Opportunities for Datadog and Kulicke

0.87

Correlation Coefficient

Datadog  Kulicke

Very poor diversification

The 3 months correlation between Datadog and Kulicke is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Datadog and Kulicke and Soffa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulicke and Soffa 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 Kulicke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulicke and Soffa has no effect on the direction of Datadog i.e., Datadog and Kulicke go up and down completely randomly.

Pair Corralation between Datadog and Kulicke

Given the investment horizon of 90 days Datadog is expected to under-perform the Kulicke. In addition to that, Datadog is 1.19 times more volatile than Kulicke and Soffa. It trades about -0.24 of its total potential returns per unit of risk. Kulicke and Soffa is currently generating about -0.22 per unit of volatility. If you would invest  4,744  in Kulicke and Soffa on December 21, 2024 and sell it today you would lose (1,155) from holding Kulicke and Soffa or give up 24.35% of portfolio value over 90 days.

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

Datadog  vs.  Kulicke and Soffa

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 weak 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.

Kulicke and Soffa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kulicke and Soffa has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Datadog and Kulicke

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

The idea behind Datadog and Kulicke and Soffa 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.