Correlation Between Pace Smallmedium and Mfs International

Can any of the company-specific risk be diversified away by investing in both Pace Smallmedium and Mfs International 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 Pace Smallmedium and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pace Smallmedium Value and Mfs International Value, you can compare the effects of market volatilities on Pace Smallmedium and Mfs International 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 Pace Smallmedium with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Smallmedium and Mfs International.

Diversification Opportunities for Pace Smallmedium and Mfs International

0.56

Correlation Coefficient

Pace Smallmedium  Mfs International

Very weak diversification

The 3 months correlation between Pace and Mfs is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pace Smallmedium Value and Mfs International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Value and Pace Smallmedium 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 Pace Smallmedium Value are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Value has no effect on the direction of Pace Smallmedium i.e., Pace Smallmedium and Mfs International go up and down completely randomly.

Pair Corralation between Pace Smallmedium and Mfs International

Assuming the 90 days horizon Pace Smallmedium is expected to generate 13.35 times less return on investment than Mfs International. In addition to that, Pace Smallmedium is 1.49 times more volatile than Mfs International Value. It trades about 0.0 of its total potential returns per unit of risk. Mfs International Value is currently generating about 0.09 per unit of volatility. If you would invest  4,751  in Mfs International Value on July 23, 2025 and sell it today you would earn a total of  207.00  from holding Mfs International Value or generate 4.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Pace Smallmedium Value  vs.  Mfs International Value

Pace Smallmedium Value

Risk-Adjusted Performance

Weakest

Over the last 90 days Pace Smallmedium Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pace Smallmedium is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs International Value

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs International Value are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mfs International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pace Smallmedium and Mfs International

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

The idea behind Pace Smallmedium Value and Mfs International Value 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.