Correlation and Lag Trades

Gold and Crude Oil in normal day to day movements are not overly correlated. They do not move tick for tick or take a lead from one another as strongly as the 10yr note and the 30yr bond. However during times of volatility, that correlation can increase and they do start following each other. Additionally, it’s not uncommon to see one market lag behind the other when volatility picks up. Here is a good example…