Correlation Between Foghorn Therapeutics and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Foghorn Therapeutics and Dow Jones 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 Foghorn Therapeutics and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foghorn Therapeutics and Dow Jones Industrial, you can compare the effects of market volatilities on Foghorn Therapeutics and Dow Jones 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 Foghorn Therapeutics with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foghorn Therapeutics and Dow Jones.
Diversification Opportunities for Foghorn Therapeutics and Dow Jones
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Foghorn and Dow is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Foghorn Therapeutics and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Foghorn Therapeutics 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 Foghorn Therapeutics are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Foghorn Therapeutics i.e., Foghorn Therapeutics and Dow Jones go up and down completely randomly.
Pair Corralation between Foghorn Therapeutics and Dow Jones
Given the investment horizon of 90 days Foghorn Therapeutics is expected to generate 1.16 times less return on investment than Dow Jones. In addition to that, Foghorn Therapeutics is 7.15 times more volatile than Dow Jones Industrial. It trades about 0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.19 per unit of volatility. If you would invest 4,093,693 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 378,513 from holding Dow Jones Industrial or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foghorn Therapeutics vs. Dow Jones Industrial
Performance |
| Timeline |
Foghorn Therapeutics and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Foghorn Therapeutics
Pair trading matchups for Foghorn Therapeutics
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Foghorn Therapeutics and Dow Jones
The main advantage of trading using opposite Foghorn Therapeutics and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foghorn Therapeutics position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Foghorn Therapeutics vs. Cue Biopharma | Foghorn Therapeutics vs. Tff Pharmaceuticals | Foghorn Therapeutics vs. Lantern Pharma | Foghorn Therapeutics vs. Eliem Therapeutics |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |