Markets

CHART OF THE DAY: Every Portfolio Manager Will Love This Chart

When investors are freaked out, they’ll dump stocks, bonds, and other investments simultaneously and almost indiscriminately. During periods of crisis, numerous asset classes will make big swings hand in hand. In other words cross-asset correlations rise. And in the wake of the financial crisis, correlations surged. One of the downsides […]
CHART OF THE DAY: Every Portfolio Manager Will Love This Chart
Markets

Why Euro And Yen Correlations To The S&P 500 Are Plunging

We continue to track the correlation of foreign currencies and the US S&P 500. There are two noteworthy developments we bring to your attention today. Methodologically we look at percentage change of the foreign currency and the percentage change in the S&P 500. The result is the correlation of returns, […]
Why Euro And Yen Correlations To The S&P 500 Are Plunging
Markets

HSBC’s Incredible Video On The Rise Of Correlated Markets

HSBC is out with a new report on RORO, the clever acronym for the “Risk On/Risk Off” phenomenon, whereby on some days a broad slew of risk assets (stocks, the aussie dollar, copper, etc.) all go up together, and then on other days, a slew of risk-off assets go up […]
HSBC’s Incredible Video On The Rise Of Correlated Markets
Markets

Amazing Visualizations Of Asset Market Correlations

[credit provider=”Marc to Market” url=”http://www.marctomarket.com/2012/04/great-graphic-asset-market-correlations.html”] Take a look at this Great Graphic.  It is some interesting work by a former colleague at HSBC, Stacy Williams.  These large correlation matrices.  The first is from 2005, pre-Lehman.  It is hard to call that period normal as, it is clear, with the benefit […]
Amazing Visualizations Of Asset Market Correlations
Markets

15 Of The Most Spurious Correlations In The Stock Market

[credit provider=”Michael Steele / Getty Images” url=”http://www.gettyimages.com/detail/news-photo/susanna-kallur-of-sweden-celebrates-winning-gold-with-twin-news-photo/71631714″] The most important metric to consider when diversifying your portfolio is correlation. Adding assets with low correlation helps to reduce volatility.Generally, there is some economic rationale that explains why assets may or may not be highly correlated.
15 Of The Most Spurious Correlations In The Stock Market