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Strategic Portfolio Construction

Positive Stock-Bond Correlation: Prospects & Portfolio Construction ImplicationsPositiveStock-BondCorrelation:Prospects&PortfolioConstructionImplications

By Dr. Noah Weisberger & Dr. Xiang Xu — Mar 29, 2024

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As part of PMA's ongoing research on strategic portfolio construction, we have explored the macro drivers, global linkages, and portfolio construction implications of stock-bond correlation in a series of papers dating back to 2021.  With US stock-bond correlation having now turned positive, in this paper we discuss which elements of the current economic landscape could provide support for an extended period of positive stock-bond correlation, we review the portfolio construction implications of positive correlation, and we assess what current stock and bond valuations may mean for forward performance. 

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  • By Dr. Noah WeisbergerManaging Director, Institutional Advisory & Solutions, PGIM
  • By Dr. Xiang XuVice President, PGIM Multi-Asset Solutions

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