Correlation Between Terreno Realty and CubeSmart
Can any of the company-specific risk be diversified away by investing in both Terreno 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 Terreno Realty and CubeSmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terreno Realty and CubeSmart, you can compare the effects of market volatilities on Terreno 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 Terreno Realty with a short position of CubeSmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terreno Realty and CubeSmart.
Diversification Opportunities for Terreno Realty and CubeSmart
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Terreno and CubeSmart is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Terreno Realty and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and Terreno 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 Terreno Realty 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 Terreno Realty i.e., Terreno Realty and CubeSmart go up and down completely randomly.
Pair Corralation between Terreno Realty and CubeSmart
Given the investment horizon of 90 days Terreno Realty is expected to generate 0.99 times more return on investment than CubeSmart. However, Terreno Realty is 1.01 times less risky than CubeSmart. It trades about 0.02 of its potential returns per unit of risk. CubeSmart is currently generating about 0.01 per unit of risk. 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 |
Terreno Realty vs. CubeSmart
Performance |
| Timeline |
| Terreno Realty |
| CubeSmart |
Terreno Realty and CubeSmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terreno Realty and CubeSmart
The main advantage of trading using opposite Terreno Realty and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terreno 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.| Terreno Realty vs. Plymouth Industrial REIT | Terreno Realty vs. EastGroup Properties | Terreno Realty vs. LXP Industrial Trust | Terreno Realty vs. First Industrial Realty |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |