Correlation Between Birks and LightInTheBox Holding

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

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

Diversification Opportunities for Birks and LightInTheBox Holding

0.26

Correlation Coefficient

Birks  LightInTheBox Holding

Modest diversification

The 3 months correlation between Birks and LightInTheBox is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Birks Group and LightInTheBox Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightInTheBox Holding and Birks 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 Birks Group are associated (or correlated) with LightInTheBox Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightInTheBox Holding has no effect on the direction of Birks i.e., Birks and LightInTheBox Holding go up and down completely randomly.

Pair Corralation between Birks and LightInTheBox Holding

Considering the 90-day investment horizon Birks Group is expected to generate 1.19 times more return on investment than LightInTheBox Holding. However, Birks is 1.19 times more volatile than LightInTheBox Holding Co. It trades about 0.08 of its potential returns per unit of risk. LightInTheBox Holding Co is currently generating about 0.05 per unit of risk. If you would invest  86.00  in Birks Group on September 5, 2025 and sell it today you would earn a total of  23.00  from holding Birks Group or generate 26.74% return on investment over 90 days.

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

Birks Group  vs.  LightInTheBox Holding Co

Birks Group

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Birks Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Birks demonstrated solid returns over the last few months and may actually be approaching a breakup point.

LightInTheBox Holding

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in LightInTheBox Holding Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LightInTheBox Holding sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Birks and LightInTheBox Holding

The main advantage of trading using opposite Birks and LightInTheBox Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birks position performs unexpectedly, LightInTheBox Holding 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 LightInTheBox Holding will offset losses from the drop in LightInTheBox Holding's long position.

The idea behind Birks Group and LightInTheBox Holding Co 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.