Correlation Between MFS Active and PIMCO Intermediate

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

By analyzing existing cross correlation between MFS Active Intermediate and PIMCO Intermediate Municipal, you can compare the effects of market volatilities on MFS Active and PIMCO Intermediate 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 PIMCO Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Active and PIMCO Intermediate.

Diversification Opportunities for MFS Active and PIMCO Intermediate

0.99

Correlation Coefficient

MFS Active  PIMCO Intermediate

No risk reduction

The 3 months correlation between MFS and PIMCO is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding MFS Active Intermediate and PIMCO Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Intermediate 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 Intermediate are associated (or correlated) with PIMCO Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Intermediate has no effect on the direction of MFS Active i.e., MFS Active and PIMCO Intermediate go up and down completely randomly.

Pair Corralation between MFS Active and PIMCO Intermediate

Given the investment horizon of 90 days MFS Active Intermediate is expected to generate 1.21 times more return on investment than PIMCO Intermediate. However, MFS Active is 1.21 times more volatile than PIMCO Intermediate Municipal. It trades about 0.11 of its potential returns per unit of risk. PIMCO Intermediate Municipal is currently generating about 0.13 per unit of risk. If you would invest  2,409  in MFS Active Intermediate on May 11, 2025 and sell it today you would earn a total of  32.00  from holding MFS Active Intermediate or generate 1.33% return on investment over 90 days.

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

MFS Active Intermediate  vs.  PIMCO Intermediate Municipal

MFS Active Intermediate

Risk-Adjusted Performance

Fair

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

PIMCO Intermediate

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Intermediate Municipal are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, PIMCO Intermediate is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with MFS Active and PIMCO Intermediate

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

The idea behind MFS Active Intermediate and PIMCO Intermediate Municipal 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.