Correlation Between Brilliant Earth and T.J. Maxx
Can any of the company-specific risk be diversified away by investing in both Brilliant Earth and T.J. Maxx 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 T.J. Maxx 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 The TJX Companies, you can compare the effects of market volatilities on Brilliant Earth and T.J. Maxx 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 T.J. Maxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brilliant Earth and T.J. Maxx.
Diversification Opportunities for Brilliant Earth and T.J. Maxx
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Brilliant and T.J. is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Brilliant Earth Group and The TJX Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJX Companies 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 T.J. Maxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJX Companies has no effect on the direction of Brilliant Earth i.e., Brilliant Earth and T.J. Maxx go up and down completely randomly.
Pair Corralation between Brilliant Earth and T.J. Maxx
Given the investment horizon of 90 days Brilliant Earth Group is expected to under-perform the T.J. Maxx. In addition to that, Brilliant Earth is 3.54 times more volatile than The TJX Companies. It trades about -0.04 of its total potential returns per unit of risk. The TJX Companies is currently generating about 0.13 per unit of volatility. If you would invest 9,003 in The TJX Companies on September 14, 2024 and sell it today you would earn a total of 3,596 from holding The TJX Companies or generate 39.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Brilliant Earth Group vs. The TJX Companies
Performance |
| Timeline |
| Brilliant Earth Group |
| TJX Companies |
Brilliant Earth and T.J. Maxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brilliant Earth and T.J. Maxx
The main advantage of trading using opposite Brilliant Earth and T.J. Maxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brilliant Earth position performs unexpectedly, T.J. Maxx 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 T.J. Maxx will offset losses from the drop in T.J. Maxx's long position.| Brilliant Earth vs. Capri Holdings | Brilliant Earth vs. Movado Group | Brilliant Earth vs. Tapestry | Brilliant Earth vs. TheRealReal |
| T.J. Maxx vs. Burlington Stores | T.J. Maxx vs. Guess Inc | T.J. Maxx vs. Urban Outfitters | T.J. Maxx vs. Childrens Place |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |