Correlation Between Buffalo High and Growth Income
Can any of the company-specific risk be diversified away by investing in both Buffalo High and Growth Income 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 Buffalo High and Growth Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buffalo High Yield and Growth Income Fund, you can compare the effects of market volatilities on Buffalo High and Growth Income 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 Buffalo High with a short position of Growth Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buffalo High and Growth Income.
Diversification Opportunities for Buffalo High and Growth Income
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Buffalo and Growth is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Buffalo High Yield and Growth Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Income and Buffalo High 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 Buffalo High Yield are associated (or correlated) with Growth Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Income has no effect on the direction of Buffalo High i.e., Buffalo High and Growth Income go up and down completely randomly.
Pair Corralation between Buffalo High and Growth Income
Assuming the 90 days horizon Buffalo High is expected to generate 2.95 times less return on investment than Growth Income. But when comparing it to its historical volatility, Buffalo High Yield is 3.27 times less risky than Growth Income. It trades about 0.12 of its potential returns per unit of risk. Growth Income Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,874 in Growth Income Fund on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Growth Income Fund or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buffalo High Yield vs. Growth Income Fund
Performance |
| Timeline |
| Buffalo High Yield |
| Growth Income |
Buffalo High and Growth Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buffalo High and Growth Income
The main advantage of trading using opposite Buffalo High and Growth Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buffalo High position performs unexpectedly, Growth Income 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 Growth Income will offset losses from the drop in Growth Income's long position.| Buffalo High vs. Buffalo Flexible Income | Buffalo High vs. Buffalo Growth Fund | Buffalo High vs. Buffalo Mid Cap | Buffalo High vs. Buffalo Emerging Opportunities |
| Growth Income vs. Ab Small Cap | Growth Income vs. Lsv Small Cap | Growth Income vs. Great West Loomis Sayles | Growth Income vs. Royce Opportunity Fund |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |