Correlation Between Buffalo Small and First Eagle
Can any of the company-specific risk be diversified away by investing in both Buffalo Small and First Eagle 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 Small and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buffalo Small Cap and First Eagle Fund, you can compare the effects of market volatilities on Buffalo Small and First Eagle 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 Small with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buffalo Small and First Eagle.
Diversification Opportunities for Buffalo Small and First Eagle
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Buffalo and First is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Buffalo Small Cap and First Eagle Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Fund and Buffalo Small 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 Small Cap are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Fund has no effect on the direction of Buffalo Small i.e., Buffalo Small and First Eagle go up and down completely randomly.
Pair Corralation between Buffalo Small and First Eagle
Assuming the 90 days horizon Buffalo Small Cap is expected to generate 1.55 times more return on investment than First Eagle. However, Buffalo Small is 1.55 times more volatile than First Eagle Fund. It trades about 0.17 of its potential returns per unit of risk. First Eagle Fund is currently generating about 0.24 per unit of risk. If you would invest 1,506 in Buffalo Small Cap on November 8, 2024 and sell it today you would earn a total of 53.00 from holding Buffalo Small Cap or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Buffalo Small Cap vs. First Eagle Fund
Performance |
| Timeline |
| Buffalo Small Cap |
| First Eagle Fund |
Buffalo Small and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buffalo Small and First Eagle
The main advantage of trading using opposite Buffalo Small and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buffalo Small position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Buffalo Small vs. Buffalo Mid Cap | Buffalo Small vs. Boston Partners Small | Buffalo Small vs. Aggressive Investors 1 | Buffalo Small vs. Meridian Trarian Fund |
| First Eagle vs. Small Cap Value | First Eagle vs. Mid Cap Growth Profund | First Eagle vs. Applied Finance Explorer | First Eagle vs. Great West Loomis Sayles |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |