Momentum

Category: Quant Insight

Short-term momentum has declined for nearly every asset, but long-term momentum is still positive for most risk assets. This is consistent with a correction within an ongoing bull market. We belive it’s important to note those assets least affected by the correction, such as emerging markets, and that these may be the leaders coming out of the correction.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based on momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

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