Category: Quant Insight

Correlations continue to rise among most asset classes. We believe this is likely due to increasing evidence of rising rates and inflation as a general macro theme. Watch for performance among rate and inflation sensitive sectors as evidence of this macro theme.

The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlations are high or rising, it may indicate that economic movements and sentiment are driving the majority of returns, which could potentially make security selection challenging.

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