Close correlations of the oil kind

Cover-close-correlations-of-the-oil-kindClose correlations of the oil kind: The changing relationship between oil and the financial markets

For multi-asset investment managers, today’s low growth, low yielding environment represents the best of times to demonstrate the power of diversification. Multi-asset investing allows investors broad scope to look for excess returns across asset classes and geographies, capturing the benefit of diversification to keep unintended portfolio risk to a minimum. Key to maximising the benefits of diversification, however, is an understanding of the correlations between different asset classes and how and why these correlations may change.

This paper focuses on how the relationship between oil and equities, and oil and the US dollar has changed in the past few years.

(Click on the cover page image for the full document).

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