Correlation Between Buffalo Small and Dreyfus Strategic

Can any of the company-specific risk be diversified away by investing in both Buffalo Small and Dreyfus Strategic 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 Dreyfus Strategic 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 Dreyfus Strategic Value, you can compare the effects of market volatilities on Buffalo Small and Dreyfus Strategic 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 Dreyfus Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buffalo Small and Dreyfus Strategic.

Diversification Opportunities for Buffalo Small and Dreyfus Strategic

0.97

Correlation Coefficient

Buffalo Small  Dreyfus Strategic

Almost no diversification

The 3 months correlation between Buffalo and Dreyfus is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Buffalo Small Cap and Dreyfus Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Strategic Value 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 Dreyfus Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Strategic Value has no effect on the direction of Buffalo Small i.e., Buffalo Small and Dreyfus Strategic go up and down completely randomly.

Pair Corralation between Buffalo Small and Dreyfus Strategic

Assuming the 90 days horizon Buffalo Small is expected to generate 1.02 times less return on investment than Dreyfus Strategic. In addition to that, Buffalo Small is 1.42 times more volatile than Dreyfus Strategic Value. It trades about 0.1 of its total potential returns per unit of risk. Dreyfus Strategic Value is currently generating about 0.15 per unit of volatility. If you would invest  4,384  in Dreyfus Strategic Value on May 6, 2025 and sell it today you would earn a total of  316.00  from holding Dreyfus Strategic Value or generate 7.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Buffalo Small Cap  vs.  Dreyfus Strategic Value

Buffalo Small Cap

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Buffalo Small Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Buffalo Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Dreyfus Strategic Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Strategic Value are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dreyfus Strategic may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Buffalo Small and Dreyfus Strategic

The main advantage of trading using opposite Buffalo Small and Dreyfus Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buffalo Small position performs unexpectedly, Dreyfus Strategic 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 Dreyfus Strategic will offset losses from the drop in Dreyfus Strategic's long position.

The idea behind Buffalo Small Cap and Dreyfus Strategic Value pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.