Report Detail Summary

Developing a Top-Down Global Framework: Part I

May 01, 2012

Being able to anticipate the changes in the correlation between the bond and sock returns is very beneficial to an asset allocation strategy. If one knows that the correlation between stocks and bonds will switch from a negative to a positive correlation, then a reduction of the exposure to bonds may be necessary in order to reduce the volatility or risk of the overall portfolio, as compared to an allocation based on an unchanging correlation.

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