Falling correlations across asset classes…WSJ

The Wall Street Journal cites a Morgan Stanley study:

“Cross-asset correlation recently fell to its lowest level since 2006, according to a Morgan Stanley analysis of 34 indicators tracking the relative performance of different asset classes and regions.”

The article goes on to suggest that the correlation decline is due to less central bank stimulus:

“Past indications of lower correlation haven’t turned into a more lasting breakdown. But the massive central-bank stimulus that investors say spurred the correlations is either beginning to, or is expected to, tail off, reducing their sway on markets, some investors say. That could create a rare opening for active-fund managers, many of whom suffered significant outflows in recent years as money migrated toward simple, low-cost, index-tracking funds.”