Correlation Between Melco Resorts and Bluegreen Vacations

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

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

Diversification Opportunities for Melco Resorts and Bluegreen Vacations

0.0

Correlation Coefficient

Melco Resorts  Bluegreen Vacations

Pay attention - limited upside

The 3 months correlation between Melco and Bluegreen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Melco Resorts Entertainment and Bluegreen Vacations Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluegreen Vacations and Melco Resorts 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 Melco Resorts Entertainment 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 Melco Resorts i.e., Melco Resorts and Bluegreen Vacations go up and down completely randomly.

Pair Corralation between Melco Resorts and Bluegreen Vacations

If you would invest (100.00) in Bluegreen Vacations Holding on December 29, 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

Melco Resorts Entertainment  vs.  Bluegreen Vacations Holding

Melco Resorts Entert

Risk-Adjusted Performance

Very Weak

Over the last 90 days Melco Resorts Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Melco Resorts is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Melco Resorts and Bluegreen Vacations

The main advantage of trading using opposite Melco Resorts and Bluegreen Vacations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melco Resorts 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 Melco Resorts Entertainment 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..