Correlation Between Americold Realty and CubeSmart
Can any of the company-specific risk be diversified away by investing in both Americold Realty 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 Americold Realty and CubeSmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americold Realty Trust and CubeSmart, you can compare the effects of market volatilities on Americold Realty 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 Americold Realty with a short position of CubeSmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americold Realty and CubeSmart.
Diversification Opportunities for Americold Realty and CubeSmart
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Americold and CubeSmart is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Americold Realty Trust and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and Americold Realty 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 Americold Realty Trust 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 Americold Realty i.e., Americold Realty and CubeSmart go up and down completely randomly.
Pair Corralation between Americold Realty and CubeSmart
Given the investment horizon of 90 days Americold Realty Trust is expected to under-perform the CubeSmart. In addition to that, Americold Realty is 1.35 times more volatile than CubeSmart. It trades about -0.27 of its total potential returns per unit of risk. CubeSmart is currently generating about -0.03 per unit of volatility. If you would invest 4,930 in CubeSmart on August 24, 2024 and sell it today you would lose (70.00) from holding CubeSmart or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americold Realty Trust vs. CubeSmart
Performance |
| Timeline |
| Americold Realty Trust |
| CubeSmart |
Americold Realty and CubeSmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americold Realty and CubeSmart
The main advantage of trading using opposite Americold Realty and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americold Realty 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.| Americold Realty vs. Rexford Industrial Realty | Americold Realty vs. Terreno Realty | Americold Realty vs. First Industrial Realty | Americold Realty vs. Plymouth Industrial REIT |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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