Correlation Between MFS Active and Vanguard Malvern

Can any of the company-specific risk be diversified away by investing in both MFS Active and Vanguard Malvern 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 Malvern 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 Malvern Funds, you can compare the effects of market volatilities on MFS Active and Vanguard Malvern 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 Malvern. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Active and Vanguard Malvern.

Diversification Opportunities for MFS Active and Vanguard Malvern

-0.09

Correlation Coefficient

MFS Active  Vanguard Malvern

Good diversification

The 3 months correlation between MFS and Vanguard is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding MFS Active Core and Vanguard Malvern Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Malvern Funds 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 Malvern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Malvern Funds has no effect on the direction of MFS Active i.e., MFS Active and Vanguard Malvern go up and down completely randomly.

Pair Corralation between MFS Active and Vanguard Malvern

Given the investment horizon of 90 days MFS Active is expected to generate 1760.99 times less return on investment than Vanguard Malvern. But when comparing it to its historical volatility, MFS Active Core is 907.43 times less risky than Vanguard Malvern. It trades about 0.13 of its potential returns per unit of risk. Vanguard Malvern Funds is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Vanguard Malvern Funds on May 1, 2025 and sell it today you would earn a total of  7,551  from holding Vanguard Malvern Funds or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	26.23%
Values	Daily Returns

MFS Active Core  vs.  Vanguard Malvern Funds

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 10 (%) 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 Malvern Funds

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Malvern Funds are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Vanguard Malvern unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MFS Active and Vanguard Malvern

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

The idea behind MFS Active Core and Vanguard Malvern Funds 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.