The primary effect was that the normal negative correlation between stock markets and bond markets flipped to become a one-way positive correlation. This is about to be reversed and I expect investors to ask themselves if the positive price correlation between all asset classes will remain if the financial markets correct down? When the Covid-19 crisis hit the financial markets, it was across all asset classes, which could hint that the positive price correlation still was intact. But last month, the positive price correlation was obviously a factor as all asset prices went lower. It leads to my conclusion to lean toward the view that the financial markets are moving back to the less positive or even negative price correlation again.

Source: Manila Times October 08, 2021 14:15 UTC