U.S. stocks tendency to
move in sync has plunged to near-record lows, but what might
seem like a stock picker s dream may actually be a mirage, and
investors may be in for a rude awakening. .
U.S. stocks' tendency to move in sync has plunged to near-record lows, but what might seem like a stock picker's dream may actually be a mirage, and investors may be in for a rude awakening. S&P 500 correlation - a gauge of herd behavior, which measures how closely daily returns of index constituents align over a month - slipped to 0.22 at the end of June, close to the lowest since November 2021, according to data from S&P Dow Jones Indices. Investors expect stocks to move increasingly out of sync as shown by the Cboe 3-Month Implied Correlation Index, which measures the 3-month expected average correlation across the top 50 value-weighted S&P 500 stocks.
The CBOE Volatility Index (VIX) has dropped to its lowest level since November 2021. On CNBC’s "Options Action," Kris Sidial, The Ambrus Group co-CIO, said…