Mill Street Research @millstreetresearch.com · 12d As @sellingtheta.bsky.social continues to point out, the historically low correlations among S&P 500 constituents is doing a HUGE amount of work in keeping overall index volatility (e.g. VIX) low despite rising volatility in most stocks and sectors. Just published this chart for clients.
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Basically diversification is as strong an effect within the index as it ever is, and that is why individual stock volatility that is near typical bear-market levels (around 50%) is not causing the S&P 500 to be volatile. Great for index-holders as long as it lasts, but implies growing instability.