Investment Philosophy

 

Correlations

Wednesday, 11 November 2009

 

Investors can achieve risk when correlations amongst assets change. Seeking a break-down in asset correlations, or a reversion to normal correlations, is a good way of achieving risk. Investors who assume normal correlations will remain intact, irrespective any change in fundamental or dynamic factors, will experience heightened levels of volatility when those correlations eventually change.

 
 
 
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