Category: Quant Insight

Correlations are increasing, indicating a strengthening macro theme. Rising rates and increased correlations among commodities and stocks indicates a growing force for inflation in the markets.

The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlations 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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