Correlation Between ArcelorMittal and Datadog
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal 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 ArcelorMittal and Datadog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA ADR and Datadog, you can compare the effects of market volatilities on ArcelorMittal 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 ArcelorMittal with a short position of Datadog. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Datadog.
Diversification Opportunities for ArcelorMittal and Datadog
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ArcelorMittal and Datadog is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Datadog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datadog and ArcelorMittal 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 ArcelorMittal SA ADR 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 ArcelorMittal i.e., ArcelorMittal and Datadog go up and down completely randomly.
Pair Corralation between ArcelorMittal and Datadog
Allowing for the 90-day total investment horizon ArcelorMittal is expected to generate 1.82 times less return on investment than Datadog. But when comparing it to its historical volatility, ArcelorMittal SA ADR is 1.6 times less risky than Datadog. It trades about 0.08 of its potential returns per unit of risk. Datadog is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11,774 in Datadog on June 2, 2025 and sell it today you would earn a total of 1,894 from holding Datadog or generate 16.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Datadog
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Datadog |
ArcelorMittal and Datadog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Datadog
The main advantage of trading using opposite ArcelorMittal and Datadog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal 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.| ArcelorMittal vs. Cleveland Cliffs | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. Nucor Corp | ArcelorMittal vs. POSCO Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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