Archives: March 2013

When it comes to the performance measurement of the stock market, the S&P 500 is considered to be one of the most widely followed and accepted benchmarks.  The interesting thing about the S&P 500 is that it is a market cap based index, i.e. the bigger the company the more influence it has on the...

One of the core principles of the asset management industry is diversification and asset allocation. You want to own a portfolio of differently correlated investments, i.e. when one zigs the other should zag. A critical component of this is the correlation coefficient between two variables. Correlation is measured between -1 and  +1.  Perfectly negatively correlated...