Correlation Between COPT Defense and CubeSmart

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

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

Diversification Opportunities for COPT Defense and CubeSmart

0.57

Correlation Coefficient

COPT Defense  CubeSmart

Very weak diversification

The 3 months correlation between COPT and CubeSmart is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding COPT Defense Properties and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and COPT Defense 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 COPT Defense 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 COPT Defense i.e., COPT Defense and CubeSmart go up and down completely randomly.

Pair Corralation between COPT Defense and CubeSmart

Considering the 90-day investment horizon COPT Defense Properties is expected to generate 0.88 times more return on investment than CubeSmart. However, COPT Defense Properties is 1.14 times less risky than CubeSmart. It trades about 0.1 of its potential returns per unit of risk. CubeSmart is currently generating about 0.04 per unit of risk. If you would invest  2,590  in COPT Defense Properties on May 1, 2025 and sell it today you would earn a total of  170.00  from holding COPT Defense Properties or generate 6.56% return on investment over 90 days.

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

COPT Defense Properties  vs.  CubeSmart

COPT Defense Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COPT Defense Properties are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, COPT Defense may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CubeSmart

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CubeSmart are ranked lower than 3 (%) 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 COPT Defense and CubeSmart

The main advantage of trading using opposite COPT Defense and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COPT Defense 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 COPT Defense Properties 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.