Strategists at Exchange on Navigating the New Correlation Regime

Volatility spikes are eroding the historical inverse relationship between equities and bonds that underpins the traditional 60/40 portfolio, weakening its diversification benefit. Panelists at Exchange discussed responses such as rethinking allocations, employing hedges and alternative strategies — signaling portfolio managers should reassess risk management and positioning.

Analysis

Volatility spikes are eroding the historical inverse relationship between equities and bonds that underpins the traditional 60/40 portfolio, weakening its diversification benefit. Panelists at Exchange discussed responses such as rethinking allocations, employing hedges and alternative strategies — signaling portfolio managers should reassess risk management and positioning.