Diamond investments – Is the market free from multiple price bubbles?

Potrykus, Marcin

doi:10.1016/j.irfa.2022.102329

Cited by 6 publications

(2 citation statements)

References 27 publications

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“…Managers have the option to participate in the luxury asset market, invest in commodity trading advisors, or buy stocks of diamond miners (Renneboog & Spaenjers, 2012; Jotanovic & D’Ecclesia, 2019). However, the primary objective is to capitalize on the overall rise of the diamond market and distance themselves from conventional assets, which tend to cause excessive volatility and distractions (Barbi & Geman, 2020; Potrykus, 2022). This predicament underscores the need to facilitate diamond-related trade by establishing effective mechanisms for price determination, transparency in information dissemination, and the availability of substantial market liquidity.…”

Section: Literature Reviewmentioning

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: Literature Reviewmentioning

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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“…This paper examines the factors that influence diamond prices, and uses multiple regression linear analysis to predict their prices, thereby enhancing its professional discourse. Diamond is an alternative type of investment, known as emotional investment, and there are existing price bubbles, which affect the price of diamonds in the market [1]. Therefore, diamonds show the price fluctuations phenomenon in the market.…”

Section: Introductionmentioning

confidence: 99%

Prediction on the Prices of Laboratory-Grown Diamonds based on Multiple Linear Regression Model

2024

HBEM

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Diamond as emotional investment, in recent years, the market price of it is going through rising and falling, and drastic fluctuating, more is the decline in price. The diamond industry has also been challenged, there is happening oversupply and weak demand in diamond market. The impact of lab-grown diamonds on natural diamonds has also changed the price of diamonds across the diamond industry. However, the market of diamond is still at the forefront of the jewelry industry. In order to ensure that consumers have more understanding of diamond choices, this paper adopts multiple linear regression model to forecast diamond prices, collects a large amount of data, and uses 4c criteria as the standard for diamond price prediction to explore the relationship between diamond prices and diamond measurement standards. Through the calculation, the diamond buyers will explore ways to realize diamond price, the diamond industry will be rationalized production, and balance the relationship between diamond supply and demand to provide a method.

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