Correlation Between SmartStop Self and Centerspace

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

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

Diversification Opportunities for SmartStop Self and Centerspace

0.52

Correlation Coefficient

SmartStop Self  Centerspace

Very weak diversification

The 3 months correlation between SmartStop and Centerspace is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SmartStop Self Storage and Centerspace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerspace and SmartStop Self 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 SmartStop Self Storage are associated (or correlated) with Centerspace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerspace has no effect on the direction of SmartStop Self i.e., SmartStop Self and Centerspace go up and down completely randomly.

Pair Corralation between SmartStop Self and Centerspace

Considering the 90-day investment horizon SmartStop Self Storage is expected to generate 0.95 times more return on investment than Centerspace. However, SmartStop Self Storage is 1.05 times less risky than Centerspace. It trades about 0.1 of its potential returns per unit of risk. Centerspace is currently generating about -0.01 per unit of risk. If you would invest  3,362  in SmartStop Self Storage on April 26, 2025 and sell it today you would earn a total of  276.00  from holding SmartStop Self Storage or generate 8.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

SmartStop Self Storage  vs.  Centerspace

SmartStop Self Storage

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SmartStop Self Storage are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal primary indicators, SmartStop Self may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Centerspace

Risk-Adjusted Performance

Very Weak

Over the last 90 days Centerspace has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Centerspace is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SmartStop Self and Centerspace

The main advantage of trading using opposite SmartStop Self and Centerspace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartStop Self position performs unexpectedly, Centerspace 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 Centerspace will offset losses from the drop in Centerspace's long position.

The idea behind SmartStop Self Storage and Centerspace 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.