Diversified portfolios exposed to correlation risk, experts warn
Market experts have warned managers to be wary of correlation risk in diversified portfolios in an environment where politics, rather than economic fundamentals, drive currency moves.
"If you have what you think is a well-diversified portfolio, what you also have is correlation risk. Politics can really shift the correlations and, in currencies, correlations are more related to the liquidity of the security than where the security gets its income. In the risk-off world, the Brazilian real
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