Correlation Between AKA Brands and Brilliant Earth
Can any of the company-specific risk be diversified away by investing in both AKA Brands and Brilliant Earth 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 AKA Brands and Brilliant Earth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKA Brands Holding and Brilliant Earth Group, you can compare the effects of market volatilities on AKA Brands and Brilliant Earth 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 AKA Brands with a short position of Brilliant Earth. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKA Brands and Brilliant Earth.
Diversification Opportunities for AKA Brands and Brilliant Earth
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AKA and Brilliant is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and Brilliant Earth Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brilliant Earth Group and AKA Brands 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 AKA Brands Holding are associated (or correlated) with Brilliant Earth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brilliant Earth Group has no effect on the direction of AKA Brands i.e., AKA Brands and Brilliant Earth go up and down completely randomly.
Pair Corralation between AKA Brands and Brilliant Earth
Considering the 90-day investment horizon AKA Brands Holding is expected to under-perform the Brilliant Earth. In addition to that, AKA Brands is 1.15 times more volatile than Brilliant Earth Group. It trades about -0.12 of its total potential returns per unit of risk. Brilliant Earth Group is currently generating about 0.05 per unit of volatility. If you would invest 161.00 in Brilliant Earth Group on August 24, 2024 and sell it today you would earn a total of 4.00 from holding Brilliant Earth Group or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKA Brands Holding vs. Brilliant Earth Group
Performance |
| Timeline |
| AKA Brands Holding |
| Brilliant Earth Group |
AKA Brands and Brilliant Earth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKA Brands and Brilliant Earth
The main advantage of trading using opposite AKA Brands and Brilliant Earth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKA Brands position performs unexpectedly, Brilliant Earth 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 Brilliant Earth will offset losses from the drop in Brilliant Earth's long position.| AKA Brands vs. Brilliant Earth Group | AKA Brands vs. Lulus Fashion Lounge | AKA Brands vs. Torrid Holdings | AKA Brands vs. Aveanna Healthcare Holdings |
| Brilliant Earth vs. Capri Holdings | Brilliant Earth vs. Movado Group | Brilliant Earth vs. Tapestry | Brilliant Earth vs. TheRealReal |
Check out your portfolio center.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..
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