The traditional relationships between asset classes – like stocks rising as bonds fall, and vice versa – are changing, making it more difficult for traders to predict market movements.
Bonds and stocks are now positively correlated after a period of negative correlation, marking a significant shift that is impacting many 60/40 portfolios.
This change in asset correlations necessitates a more flexible and active approach to trading, shifting away from traditional diversification assumptions and driving the need for non-correlated assets.
#EyeonVolatility
