Correlation Between AMTD Digital and Datadog
Can any of the company-specific risk be diversified away by investing in both AMTD Digital 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 AMTD Digital and Datadog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMTD Digital and Datadog, you can compare the effects of market volatilities on AMTD Digital 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 AMTD Digital with a short position of Datadog. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMTD Digital and Datadog.
Diversification Opportunities for AMTD Digital and Datadog
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between AMTD and Datadog is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding AMTD Digital and Datadog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datadog and AMTD Digital 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 AMTD Digital 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 AMTD Digital i.e., AMTD Digital and Datadog go up and down completely randomly.
Pair Corralation between AMTD Digital and Datadog
Considering the 90-day investment horizon AMTD Digital is expected to under-perform the Datadog. In addition to that, AMTD Digital is 1.19 times more volatile than Datadog. It trades about -0.16 of its total potential returns per unit of risk. Datadog is currently generating about 0.26 per unit of volatility. If you would invest 12,816 in Datadog on August 31, 2024 and sell it today you would earn a total of 2,380 from holding Datadog or generate 18.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMTD Digital vs. Datadog
Performance |
| Timeline |
| AMTD Digital |
| Datadog |
AMTD Digital and Datadog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMTD Digital and Datadog
The main advantage of trading using opposite AMTD Digital and Datadog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMTD Digital 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.| AMTD Digital vs. HeartCore Enterprises | AMTD Digital vs. Beamr Imaging Ltd | AMTD Digital vs. CXApp Inc | AMTD Digital vs. SoundHound AI |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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