Bonds lose hedging power?

Markets
What happened to the bullet
Author

Mike Aguilar

Published

August 31, 2026

Awesome viz from Hayung Kim in the FT illustrating the facing power of bonds to diversify.

The blue lines maps out the canonical Markowitz “bullet” that is the result of offseting correlations.

The redline is symptomatic of the corrrelation turning high and positive.

The redline suggests little benefit to diversification.