Correlation Between BrilliA and LightInTheBox Holding

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

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

Diversification Opportunities for BrilliA and LightInTheBox Holding

-0.06

Correlation Coefficient

BrilliA  LightInTheBox Holding

Good diversification

The 3 months correlation between BrilliA and LightInTheBox is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BrilliA and LightInTheBox Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightInTheBox Holding and BrilliA 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 BrilliA 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 BrilliA i.e., BrilliA and LightInTheBox Holding go up and down completely randomly.

Pair Corralation between BrilliA and LightInTheBox Holding

Given the investment horizon of 90 days BrilliA is expected to under-perform the LightInTheBox Holding. But the stock apears to be less risky and, when comparing its historical volatility, BrilliA is 1.23 times less risky than LightInTheBox Holding. The stock trades about -0.07 of its potential returns per unit of risk. The LightInTheBox Holding Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  122.00  in LightInTheBox Holding Co on May 5, 2025 and sell it today you would earn a total of  1.00  from holding LightInTheBox Holding Co or generate 0.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BrilliA  vs.  LightInTheBox Holding Co

BrilliA

Risk-Adjusted Performance

Very Weak

Over the last 90 days BrilliA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

LightInTheBox Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LightInTheBox Holding Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LightInTheBox Holding may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with BrilliA and LightInTheBox Holding

The main advantage of trading using opposite BrilliA and LightInTheBox Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrilliA 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 BrilliA 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.