Investors who have exchange traded funds (ETFs) focused internationally should note the correlation between major world regional stock markets and the broad U.S. market. Richard Shaw of Seeking Alpha writes that assembling assets with low correlation is fundamental to reducing portfolio volatility, a key type of risk. Since correlation is always changing, the dynamic of the relationship isn’t static.  Below are some comparisons of major world markets and their correlation to the Russell 3000:

Intlcorrelation_1

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.