Stock-Bond Correlation
How closely they move together
S&P 500 and Bloomberg U.S. Aggregate Bond Index
Last 12 months
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−100%0100%
--Last 3 years
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−100%0100%
--Stock Market Warning Signs
Is your portfolio diversified, or does it just look that way?
Owning different funds, or even different types of investments, does not guarantee diversification. When they all move together, you have one big bet on the table. These readings show when that is happening. Knowing when it matters and when to act takes tested rules, not a rule of thumb.
Today's readings
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What these percentages measure. They show how closely the two investments rose and fell together from one day to the next. 0% means they moved on their own. 100% means they moved almost exactly together. Below 0% means they often moved in opposite directions. Above 10%: not diversifying 0% to 10%: mostly independent Below 0%: diversifying
Stock-Gold Correlation
How closely they move together
S&P 500 and Gold
Last 12 months
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−100%0100%
--Last 3 years
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−100%0100%
--Inflation
U.S. consumer prices, change over 12 months
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Scroll left to step back through history
InflationThe Fed's 2% target
What these readings reveal
The 12-month reading shows what is happening now. The 3-year reading shows whether it is a blip or a pattern.
The names on the statement do not tell you whether a portfolio is diversified. Their behavior does.
Inflation can change those relationships. A chart shows the change.
Your diversifiers become your amplifiers.
The history since 2006
The hard part
Knowing what to do with the readings is the hard part.
It means knowing which readings matter, when they agree, what action to take and when to reverse it.
In my experience, most financial advisors I've worked with have never run a backtest. They repeat rules they have never tested.
1Test the rule
Run it through real market history before trusting it with real money.
2Watch it every day
A warning only helps when someone is looking before the fall.
3Know how to reverse it
A rule for getting out is incomplete without a tested rule for getting back in.
Keep going
How these are measured
Each reading is the correlation of daily returns between two funds over the stated window: SPY for U.S. stocks, AGG for U.S. investment-grade bonds and GLD for gold. Returns use adjusted closing prices, which include dividends, from Tiingo. Inflation is the U.S. Consumer Price Index for all items, change over 12 months, from the Bureau of Labor Statistics via FRED.
Fund tickers identify public price data. Refined FI is not affiliated with any fund sponsor and does not recommend these funds. These readings do not tell you what to buy or sell. Diversification and allocation changes can reduce risk, but they cannot guarantee against losses.
Educational only, not investment advice. Historical indicators and returns do not predict future results. Read the full disclosures.