Correlation Between Brilliant Earth and Birks
Can any of the company-specific risk be diversified away by investing in both Brilliant Earth and Birks 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 Brilliant Earth and Birks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brilliant Earth Group and Birks Group, you can compare the effects of market volatilities on Brilliant Earth and Birks 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 Brilliant Earth with a short position of Birks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brilliant Earth and Birks.
Diversification Opportunities for Brilliant Earth and Birks
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brilliant and Birks is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Brilliant Earth Group and Birks Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birks Group and Brilliant Earth 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 Brilliant Earth Group are associated (or correlated) with Birks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birks Group has no effect on the direction of Brilliant Earth i.e., Brilliant Earth and Birks go up and down completely randomly.
Pair Corralation between Brilliant Earth and Birks
Given the investment horizon of 90 days Brilliant Earth Group is expected to generate 1.42 times more return on investment than Birks. However, Brilliant Earth is 1.42 times more volatile than Birks Group. It trades about -0.05 of its potential returns per unit of risk. Birks Group is currently generating about -0.15 per unit of risk. If you would invest 235.00 in Brilliant Earth Group on August 24, 2024 and sell it today you would lose (70.00) from holding Brilliant Earth Group or give up 29.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brilliant Earth Group vs. Birks Group
Performance |
| Timeline |
| Brilliant Earth Group |
| Birks Group |
Brilliant Earth and Birks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brilliant Earth and Birks
The main advantage of trading using opposite Brilliant Earth and Birks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brilliant Earth position performs unexpectedly, Birks 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 Birks will offset losses from the drop in Birks' long position.| Brilliant Earth vs. Capri Holdings | Brilliant Earth vs. Movado Group | Brilliant Earth vs. Tapestry | Brilliant Earth vs. TheRealReal |
| Birks vs. Movado Group | Birks vs. MYT Netherlands Parent | Birks vs. Lanvin Group Holdings | Birks vs. Fossil Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |