One of the notable trends in the wake of the financial crisis has been elevated levels of correlations between stocks. In other words, stock were increasingly moving hand-in-hand.
As such, the so-called stock pickers were doing no better or worse than those investing in broad market indexes. This was problematic for the stock-picking business because its much cheaper to be an index investor.
In recent months, those correlations had come down.
However, correlations in June seem to be back on the upswing.
Here’s a chart from Citi’s Keith Miller. You can see the increase in the columns label “End of Last Month” and “End of Prior Month.”
Photo: Citi Investment Research & Analysis