Correlation Between Universal Health and CubeSmart

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

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

Diversification Opportunities for Universal Health and CubeSmart

0.52

Correlation Coefficient

Universal Health  CubeSmart

Very weak diversification

The 3 months correlation between Universal and CubeSmart is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Realty and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and Universal Health 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 Universal Health Realty 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 Universal Health i.e., Universal Health and CubeSmart go up and down completely randomly.

Pair Corralation between Universal Health and CubeSmart

Considering the 90-day investment horizon Universal Health Realty is expected to under-perform the CubeSmart. In addition to that, Universal Health is 1.41 times more volatile than CubeSmart. It trades about -0.32 of its total potential returns per unit of risk. CubeSmart is currently generating about 0.07 per unit of volatility. If you would invest  4,048  in CubeSmart on July 18, 2025 and sell it today you would earn a total of  63.00  from holding CubeSmart or generate 1.56% return on investment over 90 days.

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

Universal Health Realty  vs.  CubeSmart

Universal Health Realty

Risk-Adjusted Performance

Weakest

Over the last 90 days Universal Health Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CubeSmart

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CubeSmart are ranked lower than 1 (%) 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 Universal Health and CubeSmart

The main advantage of trading using opposite Universal Health and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health 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 Universal Health Realty 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .