Correlations at All-Time Highs

According to Bloomberg

Investors are moving in lockstep like never before, driving up stocks, commodities and emerging markets and risking a replay of last year, when they all plunged the most since World War II.

The Standard & Poor’s 500 Index, whose increase in the past three months was the steepest in seven decades, is rallying in tandem with benchmark measures for raw materials, developing-country equities and hedge funds. The so-called correlation coefficient that measures how closely markets rise and fall together has reached the highest levels ever, according to data compiled by Bloomberg.

Oceans of liquidity will do that.

Comments

[psychodave]

Not that anybody would admit quoting a psycho, but take it from me:

In times of financial stress, all correlations go to 1.00

Good to see you posting.

[RunningAmokInFantasyland]

Take it from me, in times of stress all correlations are neurasthenically hysterical.

Yes, I will have another, thank you. And a correlation for my friend too. He's feeling somewhat quoted.

[dave]

@psychodave,

I confess to quoting you "In times of financial stress, all correlations go to 1.00".

And i'm typing this from behind a black curtain, but i haven't sinned otherwise...lately.

Regards,
dave