Correlation Between IShares ESG and MFS Active

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

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

Diversification Opportunities for IShares ESG and MFS Active

0.88

Correlation Coefficient

IShares ESG  MFS Active

Very poor diversification

The 3 months correlation between IShares and MFS is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware 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 IShares ESG 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 iShares ESG Aware 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 IShares ESG i.e., IShares ESG and MFS Active go up and down completely randomly.

Pair Corralation between IShares ESG and MFS Active

Given the investment horizon of 90 days iShares ESG Aware is expected to generate 0.81 times more return on investment than MFS Active. However, iShares ESG Aware is 1.24 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 0.08 per unit of risk. If you would invest  2,892  in iShares ESG Aware on May 27, 2025 and sell it today you would earn a total of  228.00  from holding iShares ESG Aware or generate 7.88% return on investment over 90 days.

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

iShares ESG Aware  vs.  MFS Active International

iShares ESG Aware

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares ESG Aware are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, IShares ESG may actually be approaching a critical reversion point that can send shares even higher in September 2025.

MFS Active International

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in MFS Active International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, MFS Active is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with IShares ESG and MFS Active

The main advantage of trading using opposite IShares ESG and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG 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 iShares ESG Aware 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.