Falling correlations signal better times for equity long/short hedge funds

Long/short hedge funds struggle when stocks move in unison

Equity long/short hedge funds are benefiting from a drop in intra-stock correlation, which has held below its five-year average since mid-2012.

Correlation among S&P 500 stocks averaged 36% in the last six months of 2012 compared with a five-year average of around 43%, according to data provided by JP Morgan's asset management division.

The fall in intra-stock correlation is a positive sign for equity long/short strategies, which tend to struggle when individual stocks move in unison

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: