Join our community of smart investors
Opinion

Rough thinking about correlations

Rough thinking about correlations
May 29, 2013
Rough thinking about correlations

First, ask: in which possible states of the world might my assets all fall together?

One obvious possibility here is that if the equity market falls a long way, previously uncorrelated shares will rise together; this happened, for example, during the 2008-09 crisis, when most shares fell at the same time and later mostly recovered together.

This is subscriber only content
Start your trial to keep reading
PRINT AND DIGITAL trial

Get 12 weeks for £12
  • Essential access to the website and app
  • Magazine delivered every week
  • Investment ideas, tools and analysis
Have an account? Sign in