The Baltic Dry Index and Correlation to the S&P 500

By on May 16, 2009

Since 1985 the Baltic Dry Index has had a positive correlation of 0.5 to the S&P 500 (1 = perfect correlation, -1 = perfect inverse correlation). However, year to date the correlation is -0.4, curiously indicating the relationship has broken down. But wait; since the middle of March it looks like the correlation is back on track. It appears from the chart that the BDI might be signaling the world economy is improving.
Source:

 Bespoke Investment Group

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