Correlation Between CubeSmart and Montea Comm
Can any of the company-specific risk be diversified away by investing in both CubeSmart and Montea Comm 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 Montea Comm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CubeSmart and Montea Comm VA, you can compare the effects of market volatilities on CubeSmart and Montea Comm 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 Montea Comm. Check out your portfolio center. Please also check ongoing floating volatility patterns of CubeSmart and Montea Comm.
Diversification Opportunities for CubeSmart and Montea Comm
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CubeSmart and Montea is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CubeSmart and Montea Comm VA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montea Comm VA 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 Montea Comm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montea Comm VA has no effect on the direction of CubeSmart i.e., CubeSmart and Montea Comm go up and down completely randomly.
Pair Corralation between CubeSmart and Montea Comm
Assuming the 90 days horizon CubeSmart is expected to generate 0.99 times more return on investment than Montea Comm. However, CubeSmart is 1.01 times less risky than Montea Comm. It trades about 0.04 of its potential returns per unit of risk. Montea Comm VA is currently generating about 0.01 per unit of risk. If you would invest 3,482 in CubeSmart on September 14, 2024 and sell it today you would earn a total of 935.00 from holding CubeSmart or generate 26.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CubeSmart vs. Montea Comm VA
Performance |
| Timeline |
| CubeSmart |
| Montea Comm VA |
CubeSmart and Montea Comm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CubeSmart and Montea Comm
The main advantage of trading using opposite CubeSmart and Montea Comm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CubeSmart position performs unexpectedly, Montea Comm 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 Montea Comm will offset losses from the drop in Montea Comm's long position.| CubeSmart vs. Extra Space Storage | CubeSmart vs. REXFORD INDREALTY DL 01 | CubeSmart vs. First Industrial Realty | CubeSmart vs. Warehouses De Pauw |
| Montea Comm vs. Extra Space Storage | Montea Comm vs. REXFORD INDREALTY DL 01 | Montea Comm vs. CubeSmart | Montea Comm 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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