Correlation Between Brixmor Property and CubeSmart
Can any of the company-specific risk be diversified away by investing in both Brixmor Property 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 Brixmor Property and CubeSmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brixmor Property and CubeSmart, you can compare the effects of market volatilities on Brixmor Property 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 Brixmor Property with a short position of CubeSmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brixmor Property and CubeSmart.
Diversification Opportunities for Brixmor Property and CubeSmart
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brixmor and CubeSmart is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Brixmor Property and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and Brixmor Property 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 Brixmor Property 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 Brixmor Property i.e., Brixmor Property and CubeSmart go up and down completely randomly.
Pair Corralation between Brixmor Property and CubeSmart
Considering the 90-day investment horizon Brixmor Property is expected to generate 0.65 times more return on investment than CubeSmart. However, Brixmor Property is 1.53 times less risky than CubeSmart. It trades about 0.32 of its potential returns per unit of risk. CubeSmart is currently generating about 0.06 per unit of risk. If you would invest 2,773 in Brixmor Property on August 27, 2024 and sell it today you would earn a total of 210.00 from holding Brixmor Property or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brixmor Property vs. CubeSmart
Performance |
| Timeline |
| Brixmor Property |
| CubeSmart |
Brixmor Property and CubeSmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brixmor Property and CubeSmart
The main advantage of trading using opposite Brixmor Property and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brixmor Property 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.| Brixmor Property vs. Site Centers Corp | Brixmor Property vs. Acadia Realty Trust | Brixmor Property vs. Netstreit Corp | Brixmor Property vs. Urban Edge Properties |
| CubeSmart vs. Public Storage | CubeSmart vs. National Storage Affiliates | CubeSmart vs. Prologis | CubeSmart vs. Extra Space Storage |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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