Re: Correlation between real estate and stock market
[ QUOTE ]
Some of these articles appear to be confusing "low correlation" with "large negative correlation." This is disturbing.
[/ QUOTE ]
Low correlation implies that there are external factors which might affect both similarly in a minimal way.
Large negative correlation implies selection of one over the other at various times. While I would agree that there is sector rotation in the stock market between REIT and other sectors. I do not believe there to be the type of inverse correlation between the housing market and stock market in general, that you suggest.
Did you find a useful graph anywhere?
|