Portfolio Implications of a Positive Stock-Bond Correlation World
16 Pages Posted: 9 Dec 2022
Date Written: November 2022
Abstract
Understand the potential implications for portfolio performance and construction if fiscal and monetary policies produce a sustained period of positive stock-bond correlation. In a world of positive stock-bond correlation, the performance of a balanced portfolio will suffer, but the benefits of portfolio diversification remain intact.
Keywords: PGIM IAS, stock-bond correlation, portfolio risk, asset allocation, portfolio construction, developed markets, CIOs, macroeconomic, stock, bond, hedge, global perspective, fiscal policy, monetary policy, diversification, portfolio implications
Suggested Citation: Suggested Citation
Weisberger, Noah and Xu, Xiang, Portfolio Implications of a Positive Stock-Bond Correlation World (November 2022). PGIM IAS - November 2022, Available at SSRN: https://ssrn.com/abstract=4298416 or http://dx.doi.org/10.2139/ssrn.4298416
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