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Schroders: Just an illusion - Investors should beware correlations lulling them into a false sense of security

Investment News for Financial Advisers and Paraplanners

25 Feb 2016

One reason many investors find correlations so seductive is they offer the illusion of certainty. The idea that ‘if X happens, the market will do Y’ allows people to believe they possess some sort of map or manual for the world of investment and yet, as The Value Perspective has argued before in articles such as Tangled up with blue and Jellybean Trilogy 2, correlation is nothing without causation. 

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