Correlation Between Alexanders and CubeSmart

Can any of the company-specific risk be diversified away by investing in both Alexanders 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 Alexanders and CubeSmart into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alexanders and CubeSmart, you can compare the effects of market volatilities on Alexanders 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 Alexanders with a short position of CubeSmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexanders and CubeSmart.

Diversification Opportunities for Alexanders and CubeSmart

0.65

Correlation Coefficient

Alexanders  CubeSmart

Poor diversification

The 3 months correlation between Alexanders and CubeSmart is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Alexanders and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and Alexanders 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 Alexanders 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 Alexanders i.e., Alexanders and CubeSmart go up and down completely randomly.

Pair Corralation between Alexanders and CubeSmart

Considering the 90-day investment horizon Alexanders is expected to generate 1.13 times more return on investment than CubeSmart. However, Alexanders is 1.13 times more volatile than CubeSmart. It trades about 0.3 of its potential returns per unit of risk. CubeSmart is currently generating about 0.06 per unit of risk. If you would invest  19,753  in Alexanders on April 24, 2025 and sell it today you would earn a total of  5,699  from holding Alexanders or generate 28.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Alexanders  vs.  CubeSmart

Alexanders

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alexanders are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Alexanders showed solid returns over the last few months and may actually be approaching a breakup point.

CubeSmart

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CubeSmart are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, CubeSmart is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Alexanders and CubeSmart

The main advantage of trading using opposite Alexanders and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexanders 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.

The idea behind Alexanders and CubeSmart pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.