Correlation Between Bluegreen Vacations and Century Casinos

Can any of the company-specific risk be diversified away by investing in both Bluegreen Vacations and Century Casinos 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 Century Casinos 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 Century Casinos, you can compare the effects of market volatilities on Bluegreen Vacations and Century Casinos 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 Century Casinos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluegreen Vacations and Century Casinos.

Diversification Opportunities for Bluegreen Vacations and Century Casinos

0.86

Correlation Coefficient

Bluegreen Vacations  Century Casinos

Very poor diversification

The 3 months correlation between Bluegreen and Century is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bluegreen Vacations Holding and Century Casinos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Casinos 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 Century Casinos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Casinos has no effect on the direction of Bluegreen Vacations i.e., Bluegreen Vacations and Century Casinos go up and down completely randomly.

Pair Corralation between Bluegreen Vacations and Century Casinos

Considering the 90-day investment horizon Bluegreen Vacations Holding is expected to generate 0.82 times more return on investment than Century Casinos. However, Bluegreen Vacations Holding is 1.22 times less risky than Century Casinos. It trades about 0.1 of its potential returns per unit of risk. Century Casinos is currently generating about -0.01 per unit of risk. If you would invest  2,456  in Bluegreen Vacations Holding on August 31, 2024 and sell it today you would earn a total of  1,189  from holding Bluegreen Vacations Holding or generate 48.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	31.11%
Values	Daily Returns

Bluegreen Vacations Holding  vs.  Century Casinos

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.

Century Casinos

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Century Casinos are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Century Casinos showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bluegreen Vacations and Century Casinos

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

The idea behind Bluegreen Vacations Holding and Century Casinos 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.