Forward Guidance · Wednesday, September 16, 2026
Dean Curnutt, CEO of Makoresk Advisors, notes that current market conditions exhibit unusually low realized stock correlations, trending between 5-15%. He contrasts this with historical norms of 35-40% in benign markets and 85-90% during crisis events. Curnutt also touches on the rise of dispersion trades as a strategy to capitalize on this low correlation environment.
“Right. Um, you hit the nail in the head that, uh, we live in this environment in which the correlation among stocks, uh, is we've never seen anything like it. There's no comp. You can't go back five years or 10 years or 20 years. Um, you can only go back one month or three months or a year. Um, so it's been with us for about a year and a half.”
“And that is that the realized correlation of stocks in the S&P, um, is trending, uh, kind of 10 to 15%.”
“In a benign market historically, the correlation of stocks was probably 35, 40%. In a crisis event, so you could put, uh, LTCM in that category, you know, the GFC, you will see correlations of 85, 90%.”