Falling stock correlations have lifted return dispersion of its long-term average the first time since 2012; that’s according to a new report from Goldman Sachs.
The report, titled ‘stock picking in a world of normal return dispersion’ takes to look at the current state of the markets and where the most dispersion (which creates an attractive environment for active stock picking) among different sectors and stocks can be found.
The return of dispersion
Return dispersion, measured as the cross-sectional standard deviation of S&P 500 stock returns, reached an all-time low during the third quarter of 2014 and remain depressed throughout 2015.
Active Managers To Prevail As Dispersion Grows?
Active stock pickers suffered greatly as a result of this, and many active funds have...
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