Correlation Between Hudson Pacific and CubeSmart

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

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

Diversification Opportunities for Hudson Pacific and CubeSmart

0.2

Correlation Coefficient

Hudson Pacific  CubeSmart

Modest diversification

The 3 months correlation between Hudson and CubeSmart is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Pacific Properties and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and Hudson Pacific 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 Hudson Pacific 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 Hudson Pacific i.e., Hudson Pacific and CubeSmart go up and down completely randomly.

Pair Corralation between Hudson Pacific and CubeSmart

Considering the 90-day investment horizon Hudson Pacific Properties is expected to generate 2.48 times more return on investment than CubeSmart. However, Hudson Pacific is 2.48 times more volatile than CubeSmart. It trades about 0.05 of its potential returns per unit of risk. CubeSmart is currently generating about -0.06 per unit of risk. If you would invest  223.00  in Hudson Pacific Properties on May 4, 2025 and sell it today you would earn a total of  18.00  from holding Hudson Pacific Properties or generate 8.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Hudson Pacific Properties  vs.  CubeSmart

Hudson Pacific Properties

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hudson Pacific Properties are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Hudson Pacific may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hudson Pacific and CubeSmart

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

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.