In this ‘Product Insight’, we look at how correlation coefficients can potentially ‘break down’ during periods of extreme volatility. Refinitiv Datastream allows users to users to access a library of ‘functions’ which provide cloud-based calculations that are delivered instantly into either excel or charting environments.  A library of approximately 85 functions span across categories including logical, mathematical, statistical, and technical to name a few. For correlation, we need to use the CORR# function: CORR#(Variable1,Variable2,Period/frequency). While straightforward to use within the product, interpreting the end output can be challenging depending on the inputs used.  Certain considerations a user must consider include:

Commodities have been at the forefront of global markets for over a year now given its meteoric rise and its key role in supply chains during times of extreme market turmoil. The Refinitiv/Core Commodity CRB® has significantly outperformed global equities in 2021 and 2022, up 38.5% and 26.7% respectively vs. 16.1% and -11.1% for global equities.  The last time commodities outperformed global equities in a consecutive two-year period where returns were positive for both asset classes were back in 2004-2005. The Refinitiv/Core Commodity CRB® Index represents 19 commodities grouped into four major category weights including Energy (39%), Agriculture (34%), Metals

After a stellar 2020, renewable energy stocks have fallen this year, down nearly 30% relative to their high in the second week of January. Toppy valuations and investor concerns about inflation and a possible rise in interest rates have contributed to this decline, but many of the factors which prompted corporates and asset managers to add green assets to their portfolio and drove the index to highs last year remain in place. Governments around the world continue to pursue ‘net zero’ goals. Demand for ESG and sustainable products continues to grow. New financial reporting rules have come into place, such

The fact that ESG data is becoming an integral part of many fund managers’ processes is not new information – but a recent roundtable event in Singapore illustrated that institutional investors in Asia are also ramping up their interest in the investment discipline. Julia Gormand, head of market development, investment and advisory for ASEAN at Thomson Reuters and who chaired the day’s discussions, said that one of the key talking points was the fact that ESG is absolutely a key differentiator for all active managers, not just those with a social or environmental conscience. The message from the panel was

Despite steady growth in official GDP, there is mounting evidence that China is slowing yet again. Since peaking at a four-year high of 7% in July last year, our CMI 2.0 has fallen every month. It ended the first quarter of the year at 5.9%. Refresh the chart in your browser | Edit chart in Datastream   In 2014, Fathom warned of an increased risk of a hard landing in China. Within two years the pace of growth in China had dropped two-thirds from 6% to 2% — according to our measure of economic activity, the China Momentum Indicator (CMI 2.0). Against

Tesla is speeding toward capital-raise crunch time. The electric-car maker on Wednesday reported a loss of $710 million in the first three months of the year. It also experienced a slew of other problems, including annoying a regulator after disclosing information about a fatal crash and losing more key staff. Elon Musk’s big challenges are ones he has set himself. First, he charged his employees with boosting production of the Model 3 sedan to 5,000 units a month by the end of June – having reduced the goal three times last fall and winter. The company often misses production targets,

Memories of Apple nearly going bankrupt in the mid-1990s scared Steve Jobs and his colleagues. Now worth some $840 billion, it has kept an absurdly conservative balance sheet for two decades. Apple returned about $50 billion to shareholders last fiscal year through share buybacks and dividends. Yet the company, whose free cash flow more than replenishes that every year, still had over $160 billion of net cash last quarter. Doubling the payout for three years would still leave current boss Tim Cook with all the cash he needs.U.S. tax law created another balance-sheet distortion. Overseas profit was sheltered from American

Exxon Mobil’s strategy has yet to deliver returns. Despite a rise in global crude prices, the world’s largest listed, independent oil company missed earnings expectations in the first quarter as production declined. Exxon’s focus on long-term projects may eventually pay off. But investors seem less confident and competitors are passing it by. The $340 billion oil major did manage to grow earnings by 16 percent compared with the first quarter of 2017, but that’s nothing to shout about considering that crude prices were nearly a 50 percent higher than this time last year. By contrast, Chevron on Friday reported a

Amazon is widening its girth. Jeff Bezos’s firm reported first-quarter revenue grew 43 percent year-over-year. Sales have more than doubled in five years, but it’s taking more fixed assets to get there. Amazon now uses property and such with less efficiency than Walmart. Amazon said on Thursday that revenue hit $51 billion thanks to online-sales growth in North America and its fast-growing cloud-services division. Earnings of $1.6 billion caught Wall Street analysts, who expected less than half that, by surprise. But rapid sales growth comes with baggage, of the balance-sheet variety. While revenue increased more than 40 percent, the company’s

Deals rarely look as good on paper as they do in a chief executive’s head. Comcast’s $31 billion offer for UK satellite broadcaster Sky just about passes financial muster. Investors expecting a higher bid from Rupert Murdoch’s Twenty-First Century Fox , with backing from Walt Disney boss Bob Iger, are betting on the triumph of sentiment over spreadsheet. The cable giant run by Brian Roberts on Wednesday firmed up its offer of 12.50 pounds per Sky share, beating Murdoch’s December 2016 bid by 16 percent. The move endangers the mogul’s plan to sell Fox – including Sky – to Disney for $52.4 billion in

Our US Economic Sentiment Indicator (ESI) may have slipped from 6.8% to 6.3% in March, but this was still one of the highest readings in 21 years. This comes in spite of growing fears of a trade war between the US and China, which many suggested would dampen sentiment and economic activity. Some of these fears may yet be reflected in the ESI reading for April, since some survey responses for March will have been submitted before China-specific tariffs were announced on 22 March. However, fears of a trade war first surfaced in February, when the US announced tariffs on

Investing alongside Warren Buffett – as many do – doesn’t necessarily mean sharing in his successes. Consider the bid for drywall maker USG. German building-materials maker Knauf is keen to buy it, and Buffett’s Berkshire Hathaway has indicated he’s minded to sell its 31 percent stake, even backing Knauf in a campaign targeting USG’s board. It’s a rational decision on his part and fairly unhelpful for USG’s other investors. Knauf has offered $5.9 billion for USG, whose Chief Executive Jennifer Scanlon is in the process of making the company more efficient. That price is fairly meager when measured against the