Correlation Between AltShares Trust and CubeSmart

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

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

Diversification Opportunities for AltShares Trust and CubeSmart

0.11

Correlation Coefficient

AltShares Trust  CubeSmart

Average diversification

The 3 months correlation between AltShares and CubeSmart is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding AltShares Trust and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and AltShares Trust 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 AltShares Trust 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 AltShares Trust i.e., AltShares Trust and CubeSmart go up and down completely randomly.

Pair Corralation between AltShares Trust and CubeSmart

Considering the 90-day investment horizon AltShares Trust is expected to generate 0.1 times more return on investment than CubeSmart. However, AltShares Trust is 9.66 times less risky than CubeSmart. It trades about 0.0 of its potential returns per unit of risk. CubeSmart is currently generating about -0.05 per unit of risk. If you would invest  2,815  in AltShares Trust on January 23, 2025 and sell it today you would earn a total of  0.00  from holding AltShares Trust or generate 0.0% return on investment over 90 days.

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

AltShares Trust   vs.  CubeSmart

AltShares Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AltShares Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, AltShares Trust is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

CubeSmart

Risk-Adjusted Performance

Very Weak

Over the last 90 days CubeSmart has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, CubeSmart is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AltShares Trust and CubeSmart

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

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.