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 negativewith the stock market.
The team analyzed:
- S&P 500
- 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!