Sentences with phrase «increased asset correlation»
Increasing lifespans, expensive bonds and stocks, and increased asset correlation should cause investors to be skeptical of this rule of thumb.
http://www.arborinvestmentplanner.com/ Not exact matches
The growing interdependence can be seen in the increased correlation of market movements both across countries and across asset classes.
Correlations across asset classes have also been increasing.
High Frequency Cross-Market Activity in US Treasury Markets looks at the increased high - frequency correlation of trading activity across assets and trading platforms.
But no higher as the increasing correlation of assets begins to increase volatility at that point.
A recent column from Bloomberg Gadfly discusses increasing correlations of asset classes.
This has become harder over the years as the correlation between asset classes has increased in what has become a risk - on, risk - off world, reducing some of the benefits of diversification.
Risks associated with derivatives (including «short» derivatives) include losses caused by unexpected market movements (which are potentially unlimited), imperfect correlation between the price of the derivative and the price of the underlying asset, increased investment exposure (which may be considered leverage), the potential inability to terminate or sell derivatives positions, the potential need to sell securities at disadvantageous times to meet margin or segregation requirements, the potential inability to recover margin or other amounts deposited from a counterparty, and the potential failure of the other party to the instrument to meet its obligations.
As the correlations among constituent assets decrease, the long term returns of the overall portfolio generally will increase with regular re-balancing.
The correlation in global economic fundamentals is at a new high, reflected in the steadily increasing correlation in asset price movements.
The reason is correlations between different asset classes have increased.
The «asset planning» vogue of the 1990s, using historical returns and correlations to establish policy asset mix, increased pension plan equity exposure towards 70 % at the expense of fixed income which dropped towards 30 %.
Increasing correlation between asset classes makes truly diversified asset allocation tough.
Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns.
Not only does Muraki observe that the «correlation between Bitcoin and VIX has increased dramatically» in 2018, but he goes on to note «a growing number of institutional investors are watching cryptocurrencies as the frontier of risk - taking to evaluate the sustainability of asset prices».
Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns.