Correlation Between Buffalo Small and Muhlenkamp Fund
Can any of the company-specific risk be diversified away by investing in both Buffalo Small and Muhlenkamp Fund 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 Muhlenkamp Fund 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 Muhlenkamp Fund Institutional, you can compare the effects of market volatilities on Buffalo Small and Muhlenkamp Fund 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 Muhlenkamp Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buffalo Small and Muhlenkamp Fund.
Diversification Opportunities for Buffalo Small and Muhlenkamp Fund
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Buffalo and Muhlenkamp is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Buffalo Small Cap and Muhlenkamp Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muhlenkamp Fund Inst 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 Muhlenkamp Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muhlenkamp Fund Inst has no effect on the direction of Buffalo Small i.e., Buffalo Small and Muhlenkamp Fund go up and down completely randomly.
Pair Corralation between Buffalo Small and Muhlenkamp Fund
Assuming the 90 days horizon Buffalo Small Cap is expected to generate 1.63 times more return on investment than Muhlenkamp Fund. However, Buffalo Small is 1.63 times more volatile than Muhlenkamp Fund Institutional. It trades about 0.08 of its potential returns per unit of risk. Muhlenkamp Fund Institutional is currently generating about 0.11 per unit of risk. If you would invest 1,404 in Buffalo Small Cap on September 1, 2024 and sell it today you would earn a total of 192.00 from holding Buffalo Small Cap or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Buffalo Small Cap vs. Muhlenkamp Fund Institutional
Performance |
| Timeline |
| Buffalo Small Cap |
| Muhlenkamp Fund Inst |
Buffalo Small and Muhlenkamp Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buffalo Small and Muhlenkamp Fund
The main advantage of trading using opposite Buffalo Small and Muhlenkamp Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buffalo Small position performs unexpectedly, Muhlenkamp Fund 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 Muhlenkamp Fund will offset losses from the drop in Muhlenkamp Fund'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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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