Correlation Between MasTec and Quanta Services
Can any of the company-specific risk be diversified away by investing in both MasTec and Quanta Services 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 MasTec and Quanta Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MasTec Inc and Quanta Services, you can compare the effects of market volatilities on MasTec and Quanta Services 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 MasTec with a short position of Quanta Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of MasTec and Quanta Services.
Diversification Opportunities for MasTec and Quanta Services
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MasTec and Quanta is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding MasTec Inc and Quanta Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Services and MasTec 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 MasTec Inc are associated (or correlated) with Quanta Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanta Services has no effect on the direction of MasTec i.e., MasTec and Quanta Services go up and down completely randomly.
Pair Corralation between MasTec and Quanta Services
Considering the 90-day investment horizon MasTec Inc is expected to generate 1.34 times more return on investment than Quanta Services. However, MasTec is 1.34 times more volatile than Quanta Services. It trades about 0.33 of its potential returns per unit of risk. Quanta Services is currently generating about 0.3 per unit of risk. If you would invest 12,232 in MasTec Inc on August 24, 2024 and sell it today you would earn a total of 1,974 from holding MasTec Inc or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MasTec Inc vs. Quanta Services
Performance |
| Timeline |
| MasTec Inc |
| Quanta Services |
MasTec and Quanta Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MasTec and Quanta Services
The main advantage of trading using opposite MasTec and Quanta Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MasTec position performs unexpectedly, Quanta Services 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 Quanta Services will offset losses from the drop in Quanta Services' long position.| MasTec vs. EMCOR Group | MasTec vs. Comfort Systems USA | MasTec vs. Primoris Services | MasTec vs. Granite Construction Incorporated |
| Quanta Services vs. MYR Group | Quanta Services vs. Dycom Industries | Quanta Services vs. EMCOR Group | Quanta Services vs. Comfort Systems USA |
Check out your portfolio center.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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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