Still in GSG?
This guy argues that the correlations between DJ-AIG commodities index and S&P have been increasing. He only has two years’ worth of data, and you can draw a trend line through any two points of data, but his argument makes sense to me:
Not so coincidentally, commodity index ETFs made their debut in 2006. These portfolios, and the ETNs that followed, opened up new, relatively low-cost portals to commodity exposure for investors. A lot of new money has poured into the commodities asset class relying on a history of low correlation. Only time will tell if that reliance will be rewarded.
What do you guys think?
Correlation still looks pretty low to me. I’d interpret it as a random blip.
Here’s my two cents (data points). Since November 23 (the last time I rebalanced my portfolio), my SPY shares are down 19%. At the same time, GSG is down 15%. Not the negative correlation I was hoping for. BUT, DBC has been awesome during the same time period, raking in +1%. (All returns are on an annualized basis.)