Correlation Between MFS Active and Inspire Global
Can any of the company-specific risk be diversified away by investing in both MFS Active and Inspire Global 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 Inspire Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Active Value and Inspire Global Hope, you can compare the effects of market volatilities on MFS Active and Inspire Global 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 Inspire Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Active and Inspire Global.
Diversification Opportunities for MFS Active and Inspire Global
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MFS and Inspire is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding MFS Active Value and Inspire Global Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Global Hope 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 Value are associated (or correlated) with Inspire Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Global Hope has no effect on the direction of MFS Active i.e., MFS Active and Inspire Global go up and down completely randomly.
Pair Corralation between MFS Active and Inspire Global
Given the investment horizon of 90 days MFS Active is expected to generate 1.26 times less return on investment than Inspire Global. But when comparing it to its historical volatility, MFS Active Value is 1.22 times less risky than Inspire Global. It trades about 0.33 of its potential returns per unit of risk. Inspire Global Hope is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 3,984 in Inspire Global Hope on April 8, 2025 and sell it today you would earn a total of 159.00 from holding Inspire Global Hope or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
MFS Active Value vs. Inspire Global Hope
Performance |
| Timeline |
| MFS Active Value |
| Inspire Global Hope |
MFS Active and Inspire Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Active and Inspire Global
The main advantage of trading using opposite MFS Active and Inspire Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Active position performs unexpectedly, Inspire Global 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 Inspire Global will offset losses from the drop in Inspire Global's long position.| MFS Active vs. FT Vest Equity | MFS Active vs. Northern Lights | MFS Active vs. Dimensional International High | MFS Active vs. JPMorgan Fundamental Data |
| Inspire Global vs. FT Vest Equity | Inspire Global vs. Northern Lights | Inspire Global vs. Dimensional International High | Inspire Global vs. JPMorgan Fundamental Data |
Check out your portfolio center.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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