Bloomberg Surveillance · Monday, July 20, 2026
A 'high correlation accident' is a growing concern in financial markets, driven by AI's increasing influence on various market factors and the proliferation of leveraged ETFs. This interconnectedness could lead to rapid and significant market downturns.
“So one of my concerns is we've been talking some people and if you think about various factors, right, you have momentum, you have all these factors, and you know, a lot of the really best hedge funds kind of run their positions based on these factors, and they're trying to organize it.”
“And so all these things have become very correlated. And I would add that market structure to me is just off. I hate all these triple leverage gtfs.”
“So yeah, I think when this happens, it can happen really really fast. We saw a bit of it last week.”