Correlation Between SBA Communications and CubeSmart

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

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

Diversification Opportunities for SBA Communications and CubeSmart

0.07

Correlation Coefficient

SBA Communications  CubeSmart

Significant diversification

The 3 months correlation between SBA and CubeSmart is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and SBA Communications 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 SBA Communications Corp 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 SBA Communications i.e., SBA Communications and CubeSmart go up and down completely randomly.

Pair Corralation between SBA Communications and CubeSmart

Given the investment horizon of 90 days SBA Communications Corp is expected to generate 1.19 times more return on investment than CubeSmart. However, SBA Communications is 1.19 times more volatile than CubeSmart. It trades about 0.08 of its potential returns per unit of risk. CubeSmart is currently generating about 0.07 per unit of risk. If you would invest  22,177  in SBA Communications Corp on April 24, 2025 and sell it today you would earn a total of  1,514  from holding SBA Communications Corp or generate 6.83% return on investment over 90 days.

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

SBA Communications Corp  vs.  CubeSmart

SBA Communications Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SBA Communications Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, SBA Communications may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CubeSmart

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CubeSmart are ranked lower than 5 (%) 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 SBA Communications and CubeSmart

The main advantage of trading using opposite SBA Communications and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications 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 SBA Communications Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..