Correlation | August 30, 2017

Category: Quant Insight

Correlations have dropped across the board relieving some of the macro drivers that have been moving the market. If stocks can push to new highs we might see some of these macro drivers, such as inflation, reassert themselves.

The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlation are high or rising, it may indicate that economic movements and sentiment are driving the majority of returns, which could potentially make security selection challenging.

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