Correlation Between KWG Group and Datadog

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

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

Diversification Opportunities for KWG Group and Datadog

0.27

Correlation Coefficient

KWG Group  Datadog

Modest diversification

The 3 months correlation between KWG and Datadog is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding KWG Group Holdings and Datadog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datadog and KWG Group 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 KWG Group Holdings 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 KWG Group i.e., KWG Group and Datadog go up and down completely randomly.

Pair Corralation between KWG Group and Datadog

If you would invest  5.10  in KWG Group Holdings on December 27, 2024 and sell it today you would earn a total of  0.00  from holding KWG Group Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

KWG Group Holdings  vs.  Datadog

KWG Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days KWG Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KWG Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with KWG Group and Datadog

The main advantage of trading using opposite KWG Group and Datadog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KWG Group 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 KWG Group Holdings 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.