Skip to content

Decade-Defying Stock Move Gives Active Managers a Fighting Chance

  • Unlike recent drawdowns, share correlation dropped in January
  • Investors snapping up single stocks as passive inflows slow

This year’s market turbulence has brought an unexpected reprieve for long-suffering active managers: Diverging fortunes between individual stocks.

As the S&P 500 closed out its worst month since the pandemic lows, shares actually swung together less and less in January. That’s unusual -- equity correlation tends to spike during bouts of turmoil, a pattern that has played out in every drawdown of 10% or more for the past decade.