Correlation Between PIMCO ETF and MFS Active

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

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

Diversification Opportunities for PIMCO ETF and MFS Active

0.82

Correlation Coefficient

PIMCO ETF  MFS Active

Very poor diversification

The 3 months correlation between PIMCO and MFS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO ETF Trust and MFS Active Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active Intermediate and PIMCO ETF 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 PIMCO ETF Trust 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 Intermediate has no effect on the direction of PIMCO ETF i.e., PIMCO ETF and MFS Active go up and down completely randomly.

Pair Corralation between PIMCO ETF and MFS Active

Given the investment horizon of 90 days PIMCO ETF is expected to generate 2.68 times less return on investment than MFS Active. In addition to that, PIMCO ETF is 1.09 times more volatile than MFS Active Intermediate. It trades about 0.04 of its total potential returns per unit of risk. MFS Active Intermediate is currently generating about 0.12 per unit of volatility. If you would invest  2,413  in MFS Active Intermediate on May 19, 2025 and sell it today you would earn a total of  33.00  from holding MFS Active Intermediate or generate 1.37% return on investment over 90 days.

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

PIMCO ETF Trust  vs.  MFS Active Intermediate

PIMCO ETF Trust

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO ETF Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, PIMCO ETF is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

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 9 (%) 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 latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PIMCO ETF and MFS Active

The main advantage of trading using opposite PIMCO ETF and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO ETF 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 PIMCO ETF Trust and MFS Active Intermediate 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.