Bonds Become ‘Really Difficult to Trade’ as Correlations Unwind

Bonds Bonds Become ‘Really Difficult to Trade’ as Correlations Unwind Bond traders face a welter of confusion as fixed-income markets respond more to geopolitical risk and inflation rather than taking cues from traditional signals like US economic growth, according to AlphaSimplex Group’s Kathryn Kaminski. The core problem is a breakdown in cross-asset correlations, said Kaminski, chief research strategist and portfolio manager at the Boston-based quant investment firm. Bonds’ correlation with energy is stronger than with equity markets in short-term measurements, she said, making it hard to identify a clean trend.