What Does the Market Correlation Tell Us?

June 13, 2010 by Keynesian

I found this chart very interesting.  It currently doesn’t matter what stock you are in because of the high correlation. Attached is a chart that perfectly illustrates this concept. Correlation is currently at 0.75. This figure is up 50% from more normalized levels of around 0.50 and is only 0.05 pts shy of the 2008 peak in correlation.


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