PremiumShifting Correlations Unleash Market Havoc
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By Tataiana Darie, Bloomberg Markets Live reporter and strategist
The new year is bringing a new set of challenges for investors as traditional correlations get upended, making cross-asset trading more difficult. That has implications for risk management and augurs a more active allocation of holdings.
Take stocks and bonds. They were negatively correlated for most of this century, and yet they’ve famously moved in lockstep more often than not since inflation spiked and the Fed started raising rates in 2022.