Goldman Notices Credit / Equity Relative Value Divergence

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Mark Melin
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As markets continue to behave in odd and historically significant fashions, Goldman Sachs sees a relative value opportunity. In a “Portfolio Manager Action Alert,” the investment banks sees a mean divergence between bonds and equities. Such situations have a historical backdrop, the April 10 report notes, as it advises clients to look at statistical norms to recognize the trade opportunity. Credit diverges from equities, Goldman option researchers note On a risk adjusted basis, lower volatility credit investments have “significantly outperformed” stock-based assets. For instance, investment grade credit, measured by the CDX IG Five Year index, has surged ahead of their…


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Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.