Correlation Between CubeSmart and Indus Realty
Can any of the company-specific risk be diversified away by investing in both CubeSmart and Indus Realty 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 Indus Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CubeSmart and Indus Realty Trust, you can compare the effects of market volatilities on CubeSmart and Indus Realty 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 Indus Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of CubeSmart and Indus Realty.
Diversification Opportunities for CubeSmart and Indus Realty
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CubeSmart and Indus is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding CubeSmart and Indus Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indus Realty Trust 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 Indus Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indus Realty Trust has no effect on the direction of CubeSmart i.e., CubeSmart and Indus Realty go up and down completely randomly.
Pair Corralation between CubeSmart and Indus Realty
Given the investment horizon of 90 days CubeSmart is expected to generate 29.46 times more return on investment than Indus Realty. However, CubeSmart is 29.46 times more volatile than Indus Realty Trust. It trades about 0.04 of its potential returns per unit of risk. Indus Realty Trust is currently generating about 0.68 per unit of risk. If you would invest 4,156 in CubeSmart on September 4, 2024 and sell it today you would earn a total of 768.00 from holding CubeSmart or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 3.75% |
| Values | Daily Returns |
CubeSmart vs. Indus Realty Trust
Performance |
| Timeline |
| CubeSmart |
| Indus Realty Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CubeSmart and Indus Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CubeSmart and Indus Realty
The main advantage of trading using opposite CubeSmart and Indus Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CubeSmart position performs unexpectedly, Indus Realty 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 Indus Realty will offset losses from the drop in Indus Realty's long position.| CubeSmart vs. Prologis | CubeSmart vs. EastGroup Properties | CubeSmart vs. Rexford Industrial Realty | CubeSmart vs. Plymouth Industrial REIT |
| Indus Realty vs. Plymouth Industrial REIT | Indus Realty vs. First Industrial Realty | Indus Realty vs. Terreno Realty | Indus Realty vs. Rexford Industrial Realty |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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