Correlation Between Monarch Casino and Bluegreen Vacations

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

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

Diversification Opportunities for Monarch Casino and Bluegreen Vacations

0.74

Correlation Coefficient

Monarch Casino  Bluegreen Vacations

Poor diversification

The 3 months correlation between Monarch and Bluegreen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Monarch Casino Resort and Bluegreen Vacations Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluegreen Vacations and Monarch Casino 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 Monarch Casino Resort are associated (or correlated) with Bluegreen Vacations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluegreen Vacations has no effect on the direction of Monarch Casino i.e., Monarch Casino and Bluegreen Vacations go up and down completely randomly.

Pair Corralation between Monarch Casino and Bluegreen Vacations

If you would invest  7,959  in Monarch Casino Resort on August 31, 2024 and sell it today you would earn a total of  440.00  from holding Monarch Casino Resort or generate 5.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

Monarch Casino Resort  vs.  Bluegreen Vacations Holding

Monarch Casino Resort

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monarch Casino Resort are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Monarch Casino may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Bluegreen Vacations

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Monarch Casino and Bluegreen Vacations

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

The idea behind Monarch Casino Resort and Bluegreen Vacations Holding 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.