Correlation Between Bluegreen Vacations and Red Rock

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

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

Diversification Opportunities for Bluegreen Vacations and Red Rock

0.0

Correlation Coefficient

Bluegreen Vacations  Red Rock

Pay attention - limited upside

The 3 months correlation between Bluegreen and Red is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bluegreen Vacations Holding and Red Rock Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Rock Resorts and Bluegreen Vacations 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 Bluegreen Vacations Holding are associated (or correlated) with Red Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Rock Resorts has no effect on the direction of Bluegreen Vacations i.e., Bluegreen Vacations and Red Rock go up and down completely randomly.

Pair Corralation between Bluegreen Vacations and Red Rock

If you would invest (100.00) in Bluegreen Vacations Holding on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Bluegreen Vacations Holding or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bluegreen Vacations Holding  vs.  Red Rock Resorts

Bluegreen Vacations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bluegreen Vacations Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Bluegreen Vacations is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Red Rock Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Red Rock Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Red Rock is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bluegreen Vacations and Red Rock

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

The idea behind Bluegreen Vacations Holding and Red Rock Resorts 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.