Correlation Between Hilton Grand and Bluegreen Vacations

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

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

Diversification Opportunities for Hilton Grand and Bluegreen Vacations

0.71

Correlation Coefficient

Hilton Grand  Bluegreen Vacations

Poor diversification

The 3 months correlation between Hilton and Bluegreen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Grand Vacations and Bluegreen Vacations Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluegreen Vacations and Hilton Grand 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 Hilton Grand Vacations 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 Hilton Grand i.e., Hilton Grand and Bluegreen Vacations go up and down completely randomly.

Pair Corralation between Hilton Grand and Bluegreen Vacations

Considering the 90-day investment horizon Hilton Grand is expected to generate 13.2 times less return on investment than Bluegreen Vacations. But when comparing it to its historical volatility, Hilton Grand Vacations is 1.38 times less risky than Bluegreen Vacations. It trades about 0.01 of its potential returns per unit of risk. Bluegreen Vacations Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. 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	Significant
Accuracy	31.11%
Values	Daily Returns

Hilton Grand Vacations  vs.  Bluegreen Vacations Holding

Hilton Grand Vacations

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Grand Vacations are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Hilton Grand 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 Hilton Grand and Bluegreen Vacations

The main advantage of trading using opposite Hilton Grand and Bluegreen Vacations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Grand 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 Hilton Grand Vacations 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.