Correlation Between Quanta Services and PACCAR
Can any of the company-specific risk be diversified away by investing in both Quanta Services and PACCAR 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 PACCAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Services and PACCAR Inc, you can compare the effects of market volatilities on Quanta Services and PACCAR 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 PACCAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Services and PACCAR.
Diversification Opportunities for Quanta Services and PACCAR
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quanta and PACCAR is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Services and PACCAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACCAR Inc 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 PACCAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACCAR Inc has no effect on the direction of Quanta Services i.e., Quanta Services and PACCAR go up and down completely randomly.
Pair Corralation between Quanta Services and PACCAR
Considering the 90-day investment horizon Quanta Services is expected to generate 1.25 times more return on investment than PACCAR. However, Quanta Services is 1.25 times more volatile than PACCAR Inc. It trades about 0.1 of its potential returns per unit of risk. PACCAR Inc is currently generating about -0.02 per unit of risk. If you would invest 38,323 in Quanta Services on August 17, 2025 and sell it today you would earn a total of 4,607 from holding Quanta Services or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanta Services vs. PACCAR Inc
Performance |
| Timeline |
| Quanta Services |
| PACCAR Inc |
Quanta Services and PACCAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Services and PACCAR
The main advantage of trading using opposite Quanta Services and PACCAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Services position performs unexpectedly, PACCAR 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 PACCAR will offset losses from the drop in PACCAR'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 |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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