The Return Characteristics of Diamonds

Posted: 2 Jan 2013 Last revised: 23 May 2014

See all articles by Kenneth Small

Kenneth Small

Coastal Carolina Univeristy

Jeffrey Smith

Virginia Military Institute

Erika Engel Small

Coastal Carolina University

Date Written: July 1, 2012

Abstract

We outline the ethical considerations surrounding the trading of diamonds, the metrics used to value diamonds, the history of diamond trading, and the current market structure. We provide an analysis of the underlying risk and return characteristics of several individual diamond types. We show that diamonds exhibit low CAPM and Fama-French betas and exhibit low correlations with gold, the S&P 500, long-term U.S. bond prices, and U.S. inflation.

Keywords: Alternative Assest Investing, Investing, Diamonds, Commodities

JEL Classification: G20

Suggested Citation

Small, Kenneth and Smith, Jeffrey and Small, Erika Engel, The Return Characteristics of Diamonds (July 1, 2012). Journal of Investing, Spring 2013, Vol. 22, No. 1: pp. 132-143, Available at SSRN: https://ssrn.com/abstract=2195728

Kenneth Small (Contact Author)

Coastal Carolina Univeristy ( email )

P.O. Box 261954
Conway, SC 29528-6054
United States

HOME PAGE: http://ww2.coastal.edu/ksmall/

Jeffrey Smith

Virginia Military Institute ( email )

Department of Economics and Business
Scott Shipp Hall
Lexington, VA 24450
United States

Erika Engel Small

Coastal Carolina University ( email )

P.O. Box 261954
Conway, SC 29528-6054
United States

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