Market Measures

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Gold & Stocks: Positive or Negative Correlation?

Market Measures

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Gold is often considered a “flight to quality” asset. This means that during a selloff in the market we might expect to see a rally in the price of gold. As investors pull out of stocks they shift the capital into gold as a store of value.

The team decided to investigate this concept and observe whether gold typically exhibits a negative correlation with the stock market.

The team analyzed:

  • S&P 500
  • Gold
  • 1990 - Present
  • Calculated a 3 month rolling correlation every day
  • Analyzed fluctuations in this correlation

Ultimately, the spread of occurrences was varied from strong positive to strong negative correlation with a graphic showing clear fluctuations over the course of the study.

The team took it a step further to see if varying interest rates had any impact on the results.

Tune in for Tom and Tony’s full run through of the studies!

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