Correlation Between WisdomTree Europe and MFS Active
Can any of the company-specific risk be diversified away by investing in both WisdomTree Europe 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 WisdomTree Europe and MFS Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Europe SmallCap and MFS Active Growth, you can compare the effects of market volatilities on WisdomTree Europe 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 WisdomTree Europe with a short position of MFS Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Europe and MFS Active.
Diversification Opportunities for WisdomTree Europe and MFS Active
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and MFS is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Europe SmallCap and MFS Active Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active Growth and WisdomTree Europe 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 WisdomTree Europe SmallCap 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 Growth has no effect on the direction of WisdomTree Europe i.e., WisdomTree Europe and MFS Active go up and down completely randomly.
Pair Corralation between WisdomTree Europe and MFS Active
Considering the 90-day investment horizon WisdomTree Europe SmallCap is expected to generate 0.89 times more return on investment than MFS Active. However, WisdomTree Europe SmallCap is 1.12 times less risky than MFS Active. It trades about 0.15 of its potential returns per unit of risk. MFS Active Growth is currently generating about -0.07 per unit of risk. If you would invest 6,973 in WisdomTree Europe SmallCap on December 5, 2025 and sell it today you would earn a total of 559.00 from holding WisdomTree Europe SmallCap or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Europe SmallCap vs. MFS Active Growth
Performance |
| Timeline |
| WisdomTree Europe |
| MFS Active Growth |
WisdomTree Europe and MFS Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Europe and MFS Active
The main advantage of trading using opposite WisdomTree Europe and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Europe 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.| WisdomTree Europe vs. WisdomTree International MidCap | WisdomTree Europe vs. iShares MSCI Turkey | WisdomTree Europe vs. iShares Currency Hedged | WisdomTree Europe vs. iShares MSCI Japan |
| MFS Active vs. FT Vest Equity | MFS Active vs. Northern Lights | MFS Active vs. Diamond Hill Funds | MFS Active vs. Dimensional International High |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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