Correlation Between CubeSmart and Terreno Realty
Can any of the company-specific risk be diversified away by investing in both CubeSmart and Terreno 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 Terreno Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CubeSmart and Terreno Realty, you can compare the effects of market volatilities on CubeSmart and Terreno 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 Terreno Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of CubeSmart and Terreno Realty.
Diversification Opportunities for CubeSmart and Terreno Realty
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between CubeSmart and Terreno is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding CubeSmart and Terreno Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terreno Realty 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 Terreno Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terreno Realty has no effect on the direction of CubeSmart i.e., CubeSmart and Terreno Realty go up and down completely randomly.
Pair Corralation between CubeSmart and Terreno Realty
Given the investment horizon of 90 days CubeSmart is expected to generate 2.12 times less return on investment than Terreno Realty. In addition to that, CubeSmart is 1.01 times more volatile than Terreno Realty. It trades about 0.01 of its total potential returns per unit of risk. Terreno Realty is currently generating about 0.02 per unit of volatility. If you would invest 5,982 in Terreno Realty on November 9, 2024 and sell it today you would earn a total of 785.00 from holding Terreno Realty or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CubeSmart vs. Terreno Realty
Performance |
| Timeline |
| CubeSmart |
| Terreno Realty |
CubeSmart and Terreno Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CubeSmart and Terreno Realty
The main advantage of trading using opposite CubeSmart and Terreno Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CubeSmart position performs unexpectedly, Terreno 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 Terreno Realty will offset losses from the drop in Terreno Realty's long position.| CubeSmart vs. Public Storage | CubeSmart vs. National Storage Affiliates | CubeSmart vs. Prologis | CubeSmart vs. Extra Space Storage |
| Terreno Realty vs. Plymouth Industrial REIT | Terreno Realty vs. EastGroup Properties | Terreno Realty vs. LXP Industrial Trust | Terreno Realty vs. First 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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