Correlation Between GLADSTONE LAND and CubeSmart
Can any of the company-specific risk be diversified away by investing in both GLADSTONE LAND and CubeSmart 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 GLADSTONE LAND and CubeSmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLADSTONE LAND L 001 and CubeSmart, you can compare the effects of market volatilities on GLADSTONE LAND and CubeSmart 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 GLADSTONE LAND with a short position of CubeSmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLADSTONE LAND and CubeSmart.
Diversification Opportunities for GLADSTONE LAND and CubeSmart
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GLADSTONE and CubeSmart is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding GLADSTONE LAND L 001 and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and GLADSTONE LAND 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 GLADSTONE LAND L 001 are associated (or correlated) with CubeSmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CubeSmart has no effect on the direction of GLADSTONE LAND i.e., GLADSTONE LAND and CubeSmart go up and down completely randomly.
Pair Corralation between GLADSTONE LAND and CubeSmart
Assuming the 90 days horizon GLADSTONE LAND L 001 is expected to under-perform the CubeSmart. In addition to that, GLADSTONE LAND is 1.09 times more volatile than CubeSmart. It trades about -0.03 of its total potential returns per unit of risk. CubeSmart is currently generating about 0.07 per unit of volatility. If you would invest 3,414 in CubeSmart on September 15, 2024 and sell it today you would earn a total of 1,024 from holding CubeSmart or generate 29.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLADSTONE LAND L 001 vs. CubeSmart
Performance |
| Timeline |
| GLADSTONE LAND L |
| CubeSmart |
GLADSTONE LAND and CubeSmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLADSTONE LAND and CubeSmart
The main advantage of trading using opposite GLADSTONE LAND and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLADSTONE LAND position performs unexpectedly, CubeSmart 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 CubeSmart will offset losses from the drop in CubeSmart's long position.| GLADSTONE LAND vs. Extra Space Storage | GLADSTONE LAND vs. REXFORD INDREALTY DL 01 | GLADSTONE LAND vs. CubeSmart | GLADSTONE LAND vs. First Industrial Realty |
| CubeSmart vs. Extra Space Storage | CubeSmart vs. REXFORD INDREALTY DL 01 | CubeSmart vs. First Industrial Realty | CubeSmart vs. National Storage Affiliates |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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