Correlation Between Buffalo Small and Oak Ridge

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

Diversification Opportunities for Buffalo Small and Oak Ridge

0.98

Correlation Coefficient

Buffalo Small  Oak Ridge

Almost no diversification

The 3 months correlation between Buffalo and Oak is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Buffalo Small Cap and Oak Ridge Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Ridge Small 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 Oak Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Ridge Small has no effect on the direction of Buffalo Small i.e., Buffalo Small and Oak Ridge go up and down completely randomly.

Pair Corralation between Buffalo Small and Oak Ridge

Assuming the 90 days horizon Buffalo Small is expected to generate 1.33 times less return on investment than Oak Ridge. In addition to that, Buffalo Small is 1.0 times more volatile than Oak Ridge Small. It trades about 0.08 of its total potential returns per unit of risk. Oak Ridge Small is currently generating about 0.11 per unit of volatility. If you would invest  983.00  in Oak Ridge Small on May 5, 2025 and sell it today you would earn a total of  74.00  from holding Oak Ridge Small or generate 7.53% 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.  Oak Ridge Small

Buffalo Small Cap

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Buffalo Small Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Buffalo Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oak Ridge Small

Risk-Adjusted Performance

OK

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

Pair Trading with Buffalo Small and Oak Ridge

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

The idea behind Buffalo Small Cap and Oak Ridge Small 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.

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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.