“Correlated assets” is becoming the “fashion faux pas” of the investment world. Your portfolio might have looked good five years ago, but it’s just not working anymore.
The latest research shows that a diversified stock portfolio is now a somewhat contradictory concept. Whether it’s the proliferation of exchange traded funds , high frequency traders, or something else, the bottom line is that all types of stocks—large-capor small-cap—are showing a high degree of correlation.