Highlights

  • Taking a closer look at sector-specific volatilities reveals that the equity market may be more turbulent than it appears on the surface.
  • As correlation across the stocks in the S&P 500® Index has decreased, the underlying volatility in individual stocks and sectors is more likely to become a factor.
  • Historical data shows that it is very rare for short-term volatility pricing to be below its long-term average while longer-term pricing is above average. But this has been the case for the past five months.
  • The current market dynamic may create potential opportunities for active index option managers.

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