Correlation Between Advisors Inner and MFS Active

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

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

Diversification Opportunities for Advisors Inner and MFS Active

0.85

Correlation Coefficient

Advisors Inner  MFS Active

Very poor diversification

The 3 months correlation between Advisors and MFS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Advisors Inner Circle and MFS Active Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active Value and Advisors Inner 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 Advisors Inner Circle 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 Value has no effect on the direction of Advisors Inner i.e., Advisors Inner and MFS Active go up and down completely randomly.

Pair Corralation between Advisors Inner and MFS Active

Considering the 90-day investment horizon Advisors Inner is expected to generate 1.3 times less return on investment than MFS Active. But when comparing it to its historical volatility, Advisors Inner Circle is 1.42 times less risky than MFS Active. It trades about 0.17 of its potential returns per unit of risk. MFS Active Value is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,466  in MFS Active Value on May 25, 2025 and sell it today you would earn a total of  137.00  from holding MFS Active Value or generate 5.56% return on investment over 90 days.

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

Advisors Inner Circle  vs.  MFS Active Value

Advisors Inner Circle

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advisors Inner Circle are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Advisors Inner is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

MFS Active Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MFS Active Value are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, MFS Active is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Advisors Inner and MFS Active

The main advantage of trading using opposite Advisors Inner and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advisors Inner 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 Advisors Inner Circle and MFS Active Value 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.