Correlation Between Quanta Services and Emerson Electric
Can any of the company-specific risk be diversified away by investing in both Quanta Services and Emerson Electric 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 Emerson Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Services and Emerson Electric, you can compare the effects of market volatilities on Quanta Services and Emerson Electric 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 Emerson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Services and Emerson Electric.
Diversification Opportunities for Quanta Services and Emerson Electric
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Quanta and Emerson is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Services and Emerson Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Electric 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 Emerson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Electric has no effect on the direction of Quanta Services i.e., Quanta Services and Emerson Electric go up and down completely randomly.
Pair Corralation between Quanta Services and Emerson Electric
Considering the 90-day investment horizon Quanta Services is expected to generate 1.25 times more return on investment than Emerson Electric. However, Quanta Services is 1.25 times more volatile than Emerson Electric. It trades about 0.14 of its potential returns per unit of risk. Emerson Electric is currently generating about 0.03 per unit of risk. If you would invest 39,008 in Quanta Services on September 10, 2025 and sell it today you would earn a total of 7,301 from holding Quanta Services or generate 18.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanta Services vs. Emerson Electric
Performance |
| Timeline |
| Quanta Services |
| Emerson Electric |
Quanta Services and Emerson Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Services and Emerson Electric
The main advantage of trading using opposite Quanta Services and Emerson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Services position performs unexpectedly, Emerson Electric 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 Emerson Electric will offset losses from the drop in Emerson Electric's long position.| Quanta Services vs. Vertiv Holdings Co | Quanta Services vs. CSX Corporation | Quanta Services vs. Johnson Controls International | Quanta Services vs. Transdigm Group Incorporated |
| Emerson Electric vs. Illinois Tool Works | Emerson Electric vs. Howmet Aerospace | Emerson Electric vs. Johnson Controls International | Emerson Electric vs. Waste Management |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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