There's one metric that shows investors are being pickier about the stocks they buy
'Doing the actual extra homework on individual stocks actually can make a difference,' one investor said.
TL;DR
- The three-month intra-stock correlation in the S&P 500 has reached its lowest level since 1990, signaling stocks are moving independently.
- This high dispersion is largely concentrated in technology and consumer discretionary stocks, where investors are becoming more selective.
- Other sectors like financials and health care are showing more synchronized movements, benefiting from a rotation out of semiconductors.
- The market is increasingly rewarding active stock picking based on company fundamentals rather than broad macro trades.
- Experts suggest that investors should conduct thorough research on individual stocks and consider diversifying into sectors like industrials, health care, and financials.