Correlation Between Fluor and Quanta Services

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

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

Diversification Opportunities for Fluor and Quanta Services

0.85

Correlation Coefficient

Fluor  Quanta Services

Very poor diversification

The 3 months correlation between Fluor and Quanta is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Fluor and Quanta Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Services and Fluor 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 Fluor 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 Fluor i.e., Fluor and Quanta Services go up and down completely randomly.

Pair Corralation between Fluor and Quanta Services

Considering the 90-day investment horizon Fluor is expected to generate 3.04 times more return on investment than Quanta Services. However, Fluor is 3.04 times more volatile than Quanta Services. It trades about 0.08 of its potential returns per unit of risk. Quanta Services is currently generating about 0.25 per unit of risk. If you would invest  3,511  in Fluor on May 6, 2025 and sell it today you would earn a total of  631.00  from holding Fluor or generate 17.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Fluor  vs.  Quanta Services

Fluor

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fluor are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating essential indicators, Fluor reported solid returns over the last few months and may actually be approaching a breakup point.

Quanta Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quanta Services are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Quanta Services reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fluor and Quanta Services

The main advantage of trading using opposite Fluor and Quanta Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluor 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.

The idea behind Fluor and Quanta Services 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.