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Correlation | April 26, 2017

Posted on April 26, 2017

Our Observations: Short-term correlations have been declining in nearly every segment of the market. This move is breaking up the somewhat lopsided market that had been driven by interest rates and inflation expectations and provides a potential opportunity for diversification. One of the more notable changes has been the decrease in correlations for U.S. bonds […]

Correlation | April 19, 2017

Posted on April 19, 2017

Our Observations: The price of the S&P 500 peaked on March 1st and has fallen nearly 3% while the U.S. Dollar has fallen 2% relative other major currencies. We believe this has created some unique inter-market changes, including a sharp rise in the short-term correlations (22-days) of gold and silver. Precious metals tend to be […]

Correlation | April 12, 2017

Posted on April 12, 2017

Our Observations: Nearly every asset class has experienced an increase in short-term correlation (22 days), and many have risen above their long-term averages. We think this is proof of how interest rate expectations and inflation are driving near-term returns and why it is important to keep an eye on the trading pattern of interest rates. […]

Volatility | April 7, 2017

Posted on April 7, 2017

Our Observations:  Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure. Currently, near-term volatility (22 days) is below long run (12 months) in nearly every asset class, underscoring what has been […]

Correlation | April 6, 2017

Posted on April 6, 2017

Our Observations: 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. In recent months, we […]