Correlation Between MFS Active and Vanguard Multi

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

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

Diversification Opportunities for MFS Active and Vanguard Multi

-0.36

Correlation Coefficient

MFS Active  Vanguard Multi

Very good diversification

The 3 months correlation between MFS and Vanguard is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MFS Active Core and Vanguard Multi Sector Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Multi Sector and MFS Active 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 MFS Active Core are associated (or correlated) with Vanguard Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Multi Sector has no effect on the direction of MFS Active i.e., MFS Active and Vanguard Multi go up and down completely randomly.

Pair Corralation between MFS Active and Vanguard Multi

Given the investment horizon of 90 days MFS Active is expected to generate 1.35 times less return on investment than Vanguard Multi. In addition to that, MFS Active is 1.59 times more volatile than Vanguard Multi Sector Income. It trades about 0.11 of its total potential returns per unit of risk. Vanguard Multi Sector Income is currently generating about 0.24 per unit of volatility. If you would invest  5,039  in Vanguard Multi Sector Income on April 28, 2025 and sell it today you would earn a total of  64.00  from holding Vanguard Multi Sector Income or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.79%
Values	Daily Returns

MFS Active Core  vs.  Vanguard Multi Sector Income

MFS Active Core

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MFS Active Core are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, MFS Active is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Multi Sector

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Multi Sector Income are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Vanguard Multi is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MFS Active and Vanguard Multi

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

The idea behind MFS Active Core and Vanguard Multi Sector Income 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.