Tag Archives: correlation

Bonds – Small Caps Anti-correlation and Chart Illusions

The correlation between TLT and IWM was neutral in the beginning of this year but then the two started to anti-correlate as investors sold small caps and moved into bond funds. The tendency is for the anti-correlation to increase. Share

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The Apple and Gold Correlation Illusion

In an amusing post, The Reformed Broker has finally solved the puzzling, at least for some bloggers, apparent high correlation between Apple and gold. In this non-amusing post, I show that the correlation is nowhere near as high as claimed and that some … Continue reading

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Anti-Correlation Between Stocks and Bonds is Still High

The 12o-day rolling correlation between stocks and bonds made a low of -0.81 during February of 2012 and since then its has risen to slightly higher levels around -0.66. However, the correlation is still low and despite the correction due to a rise … Continue reading

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They First Got Into GOOG and Then Dumped AAPL

One of the most lucrative trades this year so far has been long GOOG and short AAPL. For equal allocation it has returned more than 36% in less that 2 months to those who have shaken out weak hands in AAPL hoping for a target … Continue reading

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Forget Everything They Taught You About Correlation

If in business school you were taught that high positive correlation means that when one security moves, either up or down, the other security moves in lockstep in the same direction and that high anti-correlation means that when one security moves, … Continue reading

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