Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Sector Correlation Climbs to a New High


Only this time, everything is going up together.

Editor's Note: This is a guest post by Don Fishback, of Don Fishback's Market Report.

One-month correlation among the 9 large stock-market sectors reached the highest level since the data became available in 1997. The high correlation is similar to what we saw in October 2008 and March 2009 when everything went down together. Only this time, everything has been going up together. The key word in those 2 sentences is "together."

Click to enlarge

As you can see from this 19-month chart, that level of connectedness usually doesn't last. Also, you can see that this is nearly the exact opposite situation from last year. Last summer you had some industry groups cratering (energy and materials) while others moved higher (consumer staples and health care).

Note that this is actual correlation, as opposed to implied correlation, which is completely different. I plan on covering the latter quite extensively in the days ahead.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos