Finanza

96%

High Correlation (85-100%): Strong positive correlation

55%

Moderate Correlation (40-85%): Moderate relationship

20%

Low Correlation (0-40%): Weak relationship

-51%

Negative Correlation: Inverse relationship (good hedge)

Asset Class	S&P 500	S&P MidCap	Russell 2000	US Agg Bonds	Gold Spot	SOFR	Crypto Index
S&P 500 Total Return	100%	97%	96%	50%	93%	55%	87%
S&P MidCap 400 Total Return	97%	100%	96%	47%	83%	48%	91%
Russell 2000 Total Return	96%	96%	100%	57%	71%	19%	90%
Bloomberg US Agg Bond TR	50%	47%	57%	100%	53%	-51%	-51%
Gold Spot (USD)	93%	83%	71%	53%	100%	49%	73%
SOFR Overnight Index Avg	55%	48%	19%	-51%	49%	100%	24%
Bloomberg Galaxy Crypto Index	87%	91%	90%	-51%	73%	24%	100%

Equity Markets Move Together Strongly

S&P 500, S&P MidCap 400, and Russell 2000 are all highly correlated (96–97% with each other).

Large-cap, mid-cap, and small-cap U.S. equities generally move in the same direction
Small-caps (Russell 2000) may diverge slightly in volatility or magnitude
Implication: Diversifying only within equities provides limited benefit

Equities & Bonds: Weak to Moderate Correlation

Correlation between equities and the Bloomberg US Aggregate Bond Index is only 47–57%.

This reflects the classic diversification benefit: bonds don't always move with equities
Makes bonds useful in balancing portfolio risk and volatility
Portfolio Strategy: A 60/40 or 70/30 stock/bond split captures this benefit

Gold as a Partial Diversifier

Gold shows moderate to strong positive correlation with equities (71–93%).

Higher than often expected, contradicting "traditional hedge" narrative
53% correlation with bonds and 49% with SOFR suggests multi-asset hedging
Can hedge across asset classes, especially in stress periods when correlations shift
Use Case: Small allocation (5-10%) for portfolio stability and inflation protection

SOFR (Overnight Rate) is Loosely Connected

SOFR correlations with equities and gold are weak to moderate (19–55%).

Makes sense: short-term interest rates are a monetary policy tool, not a direct market return driver
Negative correlation with bonds (-51%) due to inverse interest rate dynamics
Implication: SOFR provides near-zero correlation diversification for conservative portfolios

Crypto is Equity-Like, But More Extreme

The Bloomberg Galaxy Crypto Index is very strongly correlated with equities (87–91%).

Especially with mid-caps and small-caps, suggesting speculative beta exposure
Negatively correlated with bonds (-51%), showing it behaves like a risk asset
73% correlation with gold means crypto does NOT behave as "digital gold" hedge
Portfolio Role: High-risk allocation component, not a diversifier; limit to aggressive portfolios

Profile	Equities	Bonds	Gold	SOFR/Cash	Crypto	Key Benefit
Conservative	5%	80%	10%	5%	0%	Low correlation, high safety
Balanced	40%	45%	10%	5%	0%	Mixed equity/bond benefit
Dynamic	65%	20%	5%	5%	5%	Growth with hedges
Very Dynamic	75%	10%	3%	2%	10%	High growth, speculative

Correlation Matrix