There is also a rebalancing that is a function of low correlation and high volatility.
What you end up with is a fund that has very low correlation to the overall market.
First, correlations are not static, and second, low correlation itself does not guarantee a portfolio benefit in the short-term.
Though long-term Treasuries have historically had low correlation coefficients with large-cap stocks, intermediate-term Treasuries are even less correlated with large-cap stocks.
FORBES: How To Get More Diversification With Less Interest Rate Risk
Due to a relatively low correlation to other stocks, REITs reduce portfolio volatility and add a solid-yielding investment to the mix.
They have low correlation with other investments such as stocks and corporate bonds, so that helps diversify a portfolio and dampen volatility.
Another such ETF with low correlation to the market is the PowerShares Agriculture Fund ( DBA), which is an ETF comprised of agricultural commodities.
Gold typically has a low correlation with the price of equities, making it a way to hedge against ups and downs in the stock market, says Milling.
Most people are looking for a diversifier, something with low correlation.
They expected their low correlation asset classes to provide protection.
Hug really just recognized very young into the inception of MLPs the favorable characteristics of the asset class: High current income, growing distributions, tax-advantaged income, and low correlation to broader asset classes.
Gold tends to have low correlation with other financial assets and there is a credible argument that gold should have a permanent place in portfolios because of that diversification benefit.
These folks may decide to include asset classes that have no real long-term return with the hope that low correlation with other investment will generate enough excess return from rebalancing to make up for the shortfall.
The beauty with these is they do have a tremendous amount of liquidity associated with them, which is different from a lot of other asset classes that do have low correlation to the broad equity market.
If we remove Venezuela as an extreme case, and we make a statistical correlation of all the other countries in Latin America, this preliminary data set shows a very low correlation between personal and economic freedom.
FORBES: When It Comes To Health, Wealth And Happiness, Human Freedom Matters
The second thing we want is, if we wanted something that was different than a traditional bond portfolio, we wanted each manager individually to have very low correlation relative to traditional bond indexes, like the Barclays Ag.
What if there was a low-correlation strategy right under our noses the entire time?
FORBES: Sector Investing Much Smarter Than Trying To Guess What's Growth And Value
First, we know that to reduce risk you need to combine assets that have a low positive correlation or, ideally, a negative correlation with other assets.
In other words, not only can you find low-correlation sector pairings to provide true diversification, they allow for a granularity in risk management that is unavailable in traditional equity strategies.
FORBES: Sector Investing Much Smarter Than Trying To Guess What's Growth And Value
Numerous studies have shown a pretty good correlation between low costs and superior investment results.
FORBES: 10 Common Myths That Could Be Hurting Your Retirement Planning
"I haven't been able to detect any correlation between low-cost carriers and enhanced risks from flying, " he said.
They would charge extra for drivers living in accident-heavy urban areas, for homeowners who insist on building in the path of hurricanes, for deadbeats (turns out there's a correlation between low credit scores and accident-proneness) and for teenage boys.
The NIAO report also found a "strong correlation between between low levels of academic achievement and free school meal entitlement (an indicator of social deprivation)".
By itself, the chart suggests that there is indeed some correlation between high flexibility and low unemployment but because it shows averages for the whole period the diagram does not exploit the time-series aspect of the information.
On paper, the correlation between heavy fish consumption and low incidence of bipolar disorder is a strong one.
FORBES: The Fish Oil Debate: Great Brain Medicine, or Just an Expensive Placebo?
The correlation is obvious: When prices are low relative to dividends, subsequent seven-year returns are likely to be high.
But I suspect that the general conclusions would hold: the correlation between gun laws and gun deaths is low.
That being said, there is some negative correlation evidence in the data that shows pessimistically low sentiment among market experts is often followed by higher stock prices.
Some may argue that the present, wider high yield spread is a function of the low Treasury yields, but historically there has been little correlation between the spread-versus-Treasuries and nominal Treasury yields.
FORBES: Are Credit Measures Worse Now Than At The Start Of Last Recession?
Various academic studies had found a suspiciously strong correlation between the issue dates of share options awarded to employees and low points in the awarding company's share price.
ECONOMIST: A conviction for backdating options may be the first of many
应用推荐