Correlation Between CubeSmart and Innovative Industrial
Can any of the company-specific risk be diversified away by investing in both CubeSmart and Innovative Industrial 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 CubeSmart and Innovative Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CubeSmart and Innovative Industrial Properties, you can compare the effects of market volatilities on CubeSmart and Innovative Industrial 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 CubeSmart with a short position of Innovative Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CubeSmart and Innovative Industrial.
Diversification Opportunities for CubeSmart and Innovative Industrial
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CubeSmart and Innovative is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CubeSmart and Innovative Industrial Properti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Industrial and CubeSmart 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 CubeSmart are associated (or correlated) with Innovative Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Industrial has no effect on the direction of CubeSmart i.e., CubeSmart and Innovative Industrial go up and down completely randomly.
Pair Corralation between CubeSmart and Innovative Industrial
Given the investment horizon of 90 days CubeSmart is expected to generate 0.52 times more return on investment than Innovative Industrial. However, CubeSmart is 1.92 times less risky than Innovative Industrial. It trades about 0.11 of its potential returns per unit of risk. Innovative Industrial Properties is currently generating about -0.23 per unit of risk. If you would invest 4,801 in CubeSmart on August 27, 2024 and sell it today you would earn a total of 185.00 from holding CubeSmart or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CubeSmart vs. Innovative Industrial Properti
Performance |
| Timeline |
| CubeSmart |
| Innovative Industrial |
CubeSmart and Innovative Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CubeSmart and Innovative Industrial
The main advantage of trading using opposite CubeSmart and Innovative Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CubeSmart position performs unexpectedly, Innovative Industrial 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 Innovative Industrial will offset losses from the drop in Innovative Industrial's long position.| CubeSmart vs. Public Storage | CubeSmart vs. National Storage Affiliates | CubeSmart vs. Prologis | CubeSmart vs. Extra Space Storage |
| Innovative Industrial vs. Prologis | Innovative Industrial vs. Public Storage | Innovative Industrial vs. Extra Space Storage | Innovative Industrial vs. CubeSmart |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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