Correlation Between Quanta Services and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Quanta Services and Eiffage SA 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 Quanta Services and Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Services and Eiffage SA, you can compare the effects of market volatilities on Quanta Services and Eiffage SA 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 Quanta Services with a short position of Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Services and Eiffage SA.
Diversification Opportunities for Quanta Services and Eiffage SA
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quanta and Eiffage is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Services and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA and Quanta Services 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 Quanta Services are associated (or correlated) with Eiffage SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiffage SA has no effect on the direction of Quanta Services i.e., Quanta Services and Eiffage SA go up and down completely randomly.
Pair Corralation between Quanta Services and Eiffage SA
If you would invest 30,163 in Quanta Services on September 1, 2024 and sell it today you would earn a total of 4,289 from holding Quanta Services or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Quanta Services vs. Eiffage SA
Performance |
| Timeline |
| Quanta Services |
| Eiffage SA |
Quanta Services and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Services and Eiffage SA
The main advantage of trading using opposite Quanta Services and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Services position performs unexpectedly, Eiffage SA 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 Eiffage SA will offset losses from the drop in Eiffage SA's long position.| Quanta Services vs. MYR Group | Quanta Services vs. Dycom Industries | Quanta Services vs. EMCOR Group | Quanta Services vs. Comfort Systems USA |
| Eiffage SA vs. Orion Group Holdings | Eiffage SA vs. Agrify Corp | Eiffage SA vs. Matrix Service Co | Eiffage SA vs. MYR Group |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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