Correlation Between VICI Properties and CubeSmart

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

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

Diversification Opportunities for VICI Properties and CubeSmart

0.79

Correlation Coefficient

VICI Properties  CubeSmart

Poor diversification

The 3 months correlation between VICI and CubeSmart is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and VICI Properties 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 VICI 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 VICI Properties i.e., VICI Properties and CubeSmart go up and down completely randomly.

Pair Corralation between VICI Properties and CubeSmart

Given the investment horizon of 90 days VICI Properties is expected to generate 0.68 times more return on investment than CubeSmart. However, VICI Properties is 1.47 times less risky than CubeSmart. It trades about -0.02 of its potential returns per unit of risk. CubeSmart is currently generating about -0.02 per unit of risk. If you would invest  3,305  in VICI Properties on August 30, 2024 and sell it today you would lose (45.00) from holding VICI Properties or give up 1.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

VICI Properties  vs.  CubeSmart

VICI Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VICI Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, VICI Properties is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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 VICI Properties and CubeSmart

The main advantage of trading using opposite VICI Properties and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties 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 VICI 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.