Correlation Between Brixmor Property and CubeSmart

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

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

Diversification Opportunities for Brixmor Property and CubeSmart

-0.4

Correlation Coefficient

Brixmor Property  CubeSmart

Very good diversification

The 3 months correlation between Brixmor and CubeSmart is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Brixmor Property and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and Brixmor Property 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 Brixmor Property 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 Brixmor Property i.e., Brixmor Property and CubeSmart go up and down completely randomly.

Pair Corralation between Brixmor Property and CubeSmart

Considering the 90-day investment horizon Brixmor Property is expected to generate 0.74 times more return on investment than CubeSmart. However, Brixmor Property is 1.35 times less risky than CubeSmart. It trades about 0.18 of its potential returns per unit of risk. CubeSmart is currently generating about -0.03 per unit of risk. If you would invest  2,705  in Brixmor Property on September 2, 2024 and sell it today you would earn a total of  302.00  from holding Brixmor Property or generate 11.16% return on investment over 90 days.

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

Brixmor Property  vs.  CubeSmart

Brixmor Property

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brixmor Property are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Brixmor Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CubeSmart

Risk-Adjusted Performance

0 of 100

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

Pair Trading with Brixmor Property and CubeSmart

The main advantage of trading using opposite Brixmor Property and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brixmor Property 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 Brixmor Property 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..