Correlation Between AMERICAN BEACON and MFS Active

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

By analyzing existing cross correlation between AMERICAN BEACON INTERNATIONAL and MFS Active International, you can compare the effects of market volatilities on AMERICAN BEACON and MFS Active 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 AMERICAN BEACON with a short position of MFS Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERICAN BEACON and MFS Active.

Diversification Opportunities for AMERICAN BEACON and MFS Active

0.58

Correlation Coefficient

AMERICAN BEACON  MFS Active

Very weak diversification

The 3 months correlation between AMERICAN and MFS is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN BEACON INTERNATIONAL and MFS Active International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active International and AMERICAN BEACON 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 AMERICAN BEACON INTERNATIONAL are associated (or correlated) with MFS Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Active International has no effect on the direction of AMERICAN BEACON i.e., AMERICAN BEACON and MFS Active go up and down completely randomly.

Pair Corralation between AMERICAN BEACON and MFS Active

Assuming the 90 days horizon AMERICAN BEACON is expected to generate 4.69 times less return on investment than MFS Active. But when comparing it to its historical volatility, AMERICAN BEACON INTERNATIONAL is 5.21 times less risky than MFS Active. It trades about 0.2 of its potential returns per unit of risk. MFS Active International is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,640  in MFS Active International on April 30, 2025 and sell it today you would earn a total of  213.00  from holding MFS Active International or generate 8.07% return on investment over 90 days.

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

AMERICAN BEACON INTERNATIONAL  vs.  MFS Active International

AMERICAN BEACON INTE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AMERICAN BEACON INTERNATIONAL are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, AMERICAN BEACON is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

MFS Active International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MFS Active International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, MFS Active may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with AMERICAN BEACON and MFS Active

The main advantage of trading using opposite AMERICAN BEACON and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERICAN BEACON position performs unexpectedly, MFS Active 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 MFS Active will offset losses from the drop in MFS Active's long position.

The idea behind AMERICAN BEACON INTERNATIONAL and MFS Active International 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.