Correlation Between Eastman Chemical and Datadog
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical 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 Eastman Chemical and Datadog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Datadog, you can compare the effects of market volatilities on Eastman Chemical 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 Eastman Chemical with a short position of Datadog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Datadog.
Diversification Opportunities for Eastman Chemical and Datadog
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eastman and Datadog is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Datadog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datadog and Eastman Chemical 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 Eastman Chemical 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 Eastman Chemical i.e., Eastman Chemical and Datadog go up and down completely randomly.
Pair Corralation between Eastman Chemical and Datadog
Considering the 90-day investment horizon Eastman Chemical is expected to under-perform the Datadog. But the stock apears to be less risky and, when comparing its historical volatility, Eastman Chemical is 1.72 times less risky than Datadog. The stock trades about -0.07 of its potential returns per unit of risk. The Datadog is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,469 in Datadog on August 31, 2025 and sell it today you would earn a total of 2,532 from holding Datadog or generate 18.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Datadog
Performance |
| Timeline |
| Eastman Chemical |
| Datadog |
Eastman Chemical and Datadog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Datadog
The main advantage of trading using opposite Eastman Chemical and Datadog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical 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.| Eastman Chemical vs. B Communications | Eastman Chemical vs. Trip Technologies | Eastman Chemical vs. Easy Technologies | Eastman Chemical vs. Amkor Technology |
| Datadog vs. Mitsui Chemicals ADR | Datadog vs. ISE Chemicals | Datadog vs. Evolution Mining Limited | Datadog vs. Harmony Gold Mining |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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