The 20 day rolling correlations of various asset classes to SPY have remained near recent market crash levels. Foreign stocks (EFA) and commodities (DBC) have not yet cycled back into the range of the prior couple of years. (See plots above.) Is there any hope for a sustained stock market rally with correlations between asset classes remaining higher than usual?
The correlation of the SPY to VIX has recently become less negative. It is at levels not seen since early 2008. (See plot above.) Is the panic beginning to fade? Can the market sustain a range bound trade without another crash?
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