Correlation Between Urban Edge and CubeSmart
Can any of the company-specific risk be diversified away by investing in both Urban Edge 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 Urban Edge and CubeSmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Edge Properties and CubeSmart, you can compare the effects of market volatilities on Urban Edge 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 Urban Edge with a short position of CubeSmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and CubeSmart.
Diversification Opportunities for Urban Edge and CubeSmart
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Urban and CubeSmart is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and Urban Edge 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 Urban Edge Properties 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 Urban Edge i.e., Urban Edge and CubeSmart go up and down completely randomly.
Pair Corralation between Urban Edge and CubeSmart
Allowing for the 90-day total investment horizon Urban Edge is expected to generate 1.01 times less return on investment than CubeSmart. But when comparing it to its historical volatility, Urban Edge Properties is 1.46 times less risky than CubeSmart. It trades about 0.21 of its potential returns per unit of risk. CubeSmart is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,766 in CubeSmart on August 30, 2024 and sell it today you would earn a total of 248.00 from holding CubeSmart or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Edge Properties vs. CubeSmart
Performance |
| Timeline |
| Urban Edge Properties |
| CubeSmart |
Urban Edge and CubeSmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and CubeSmart
The main advantage of trading using opposite Urban Edge and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge 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.| Urban Edge vs. Saul Centers | Urban Edge vs. Site Centers Corp | Urban Edge vs. Acadia Realty Trust | Urban Edge vs. Retail Opportunity Investments |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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