Enhancing Portfolio Diversification: <i>Are Diamonds Forever?</i>

Beccacece, Francesca; Cantù, Valeria

doi:10.3905/joi.2015.24.4.092

Cited by 2 publications

(1 citation statement)

References 19 publications

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“…In contrast, it is worth noting that precious stones, as a unique asset, hold significant importance to portfolio diversification and "safe haven" provision in times of market turbulence. (Small et al, 2012(Small et al, , 2013Auer & Schuhmacher, 2013;Auer, 2014;Beccacece & Cantu, 2015;Low et al, 2016;Bedoui et al, 2020). As a result, they may fulfill a crucial function in stabilizing the prices of digital coins.…”

Section: Diamond-connected Cryptocurrenciesmentioning

confidence: 99%

Hedging in the Stock Market: Is the Colored Coin Better than the Physically-Backed Diamond Index?

Cui,

Gao,

Wang

et al. 2024

Journal of Alternative Finance

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The present paper examines the potential utilization of diamond-connected cryptocurrencies as one novel means to acquire long or short positions in tangible diamonds. We evaluate the equity risk hedging capability of two popular colored coins associated with diamonds, namely PinkCoin and CaratCoin. PinkCoin is chosen over CaratCoin for further analysis due to its extensive transaction data, allowing for a comparison with a benchmark diamond price aggregate. Our results suggest incorporating such tokens in portfolios enables protection against swings in the equity market, particularly during periods of market decline. Moreover, these assets have the attribute of augmenting portfolio diversification within a conventional mean-variance frontier framework. The reconciliation of colored coins’ accessibility and price fluctuations with the safe-haven characteristic of diamonds has resulted in unique diversification benefits comparable to those associated with trading natural gemstones. Although the conclusion above holds significant appeal for investors who favor the inclusion of diamonds in their investment portfolios, it harbors concerns regarding liquidity and the assurance of genuineness.

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Section: Diamond-connected Cryptocurrenciesmentioning

confidence: 99%

Hedging in the Stock Market: Is the Colored Coin Better than the Physically-Backed Diamond Index?

Cui,

Gao,

Wang

et al. 2024

Journal of Alternative Finance

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Daily abnormal returns and price effects in the “passion investments” market

Plastun

Havrylina

Sliusareva

et al. 2021

Investment Management and Financial Innovations

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This paper explores price effects in the “passion investments” market after days with abnormal returns. To do this, daily prices for stamps and diamonds over the periods 1999–2021 and 1989–2021 are analyzed. The following hypothesis is tested: One-day abnormal returns create stable patterns in price behavior on the next day. Statistic tests (t-test, ANOVA, Mann–Whitney U test, modified cumulative abnormal returns approach, regression analysis with dummy variables) confirm the presence of price patterns related to extreme returns: price fluctuations on the day after extreme returns are higher than returns on “normal” days. On the days after positive abnormal returns, the momentum effect is detected. Contrarian effect is typical for the days after negative abnormal returns. A trading strategy based on detected price effects showed the presence of exploitable profit opportunities. Results of this paper provide additional pieces of evidence in favor of inconsistencies between the efficient market hypothesis and practice and can be used by traders to generate extra profits in the “passion investments” market. Acknowledgment The authors gratefully acknowledge financial support from the Ministry of Education and Science of Ukraine (0121U100473).

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Enhancing Portfolio Diversification: Are Diamonds Forever?

Cited by 2 publications

References 19 publications

Hedging in the Stock Market: Is the Colored Coin Better than the Physically-Backed Diamond Index?

Hedging in the Stock Market: Is the Colored Coin Better than the Physically-Backed Diamond Index?

Daily abnormal returns and price effects in the “passion investments” market

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