Volatility

Category: Quant Insight

Short- and long-term volatility are in parity, except in emerging markets. We think the decline in short-term risk for emerging markets may signal that the strong bull market in this region of the world is continuing and should not be not ending any time soon.

Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure.

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