Asset Classes/Strategies With No Or Negative Correlations to Equities
A small project I am working on. There is a difference between no correlation and negative correlation. Nothing in this context is infallible, but quite a few are pretty reliable.
1. Long volatility
A reliable one for negative correlation but this exposure can do down in value dramatically when stocks go up.
2. Managed futures
Pretty reliably negative.
No reliable relationship either way. Sometimes positively correlated to stocks, sometimes no correlation and at times it has been negatively correlated.
4. Electricity futures
This is a new one to me. A new fund just started trading under symbol AMPD. The fund manager was on Bloomberg TV, he said electricity futures have no correlation. I have no idea, we'll see.
5. Long low beta/short high beta
This pertains to just one fund that I know of that is pretty reliably negative.
6. Convertible arbitrage
Looks like low correlation because of very low volatility.
7. Merger arbitrage
Also looks like low correlation because of very low volatility.
Often negative but not always.
9. Other commodities
Similar story as with gold but broad commodities often trades differently than gold.