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Definition of 'Decoupling'
The occurrence of returns on asset classes diverging from their expected or normal pattern of correlation. Decoupling takes place when two different asset classes that typically rise and fall together move in opposing directions, such as one increasing and the other decreasing. For example, stock and corporate bond returns generally move together. If the stock returns were to increase while the returns on bonds decreased, decoupling would have occurred. Another example can be seen with oil and natural gas prices; these typically rise and fall together. Decoupling occurs when oil moves in one direction and natural gas moves in the opposite direction.
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Investopedia explains 'Decoupling'
Decoupling refers to a decrease in correlation. The concept that the world's emerging markets no longer need to depend on U.S. demand to drive economic growth, is an example of economic decoupling. Whereas, emerging markets at one point relied on the U.S. economy, many analysts now argue that some emerging markets, such as China, India and Brazil, have become sizable markets on their own, for goods and services. The argument for decoupling indicates that these economies would be able to withstand a faltering U.S. economy.
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Search results for 'Decoupling'
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http://www.investopedia.com/articles/stocks/11/cautionary-international-investors.asp
... (To learn more, read How US Firms Benefit When The Dollar Falls.) Debunking the
Decoupling Theory One of the aspects of international diversification used by ...
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http://stocks.investopedia.com/stock-analysis/moneyshow/WhyThetaCanMisleadDuringEarnings.aspx
... In addressing this subject in The Volatility Edge in Options Trading, Jeff Augen
asserts, “The effect we are discussing involves a decoupling of option ...
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http://www.investopedia.com/articles/optioninvestor/09/implied-volatility-contrary-indicator.asp
... Derivatives During Decoupling While it is rare, there are times when the normal
relationship between the VIX and S&P 500 change or "decouple." Figure 2 shows ...
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http://www.investopedia.com/articles/trading/09/understanding-intermarket-analysis.asp
... It is also important to be aware of events that may be affecting a specific
stock or asset class that could cause a decoupling of markets. ...
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http://stocks.investopedia.com/stock-analysis/2011/Which-Consumer-Do-You-Bet-On-CMG-PNRA-SKS-WMT-TGT1118.aspx
... There is a decoupling going on in the economy today. Media coverage of
the Occupy Wall Street protesting, 9% unemployment and a ...
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http://stocks.investopedia.com/stock-analysis/2009/The-Frontier-Awaits-FRN-PMNA-EEM0525.aspx
... This has led to the questioning of the theory of decoupling. Emerging markets,
at one time, offered low correlation to the developed world. ...
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http://stocks.investopedia.com/stock-analysis/2009/Kellogg-Benefits-From-Brand-Loyalty-K-KO-PG-ZINC1102.aspx
... In fact, over time, we may begin to see a decoupling where the quality names continue
to gain market share and deliver solid profitability while the rest have ...
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http://stocks.investopedia.com/stock-analysis/2012/Playing-BlackRocks-2012-Forecast-BLK-IVW-XLG-LQD0110.aspx
... In fact, asset managers predict that 2012 could be the year when the decoupling
theory finally materializes and emerging market nations ultimately move into ...
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http://stocks.investopedia.com/stock-analysis/2010/SEA-Ship-Shape-Again-SEA-SSW-SFL-FRO-DRYS-GNK-EGLE0615.aspx
... I suspect this decoupling is due to a sharp recent drop in investors' risk appetite
and I would expect the stocks to rebound as investors realize the global ...
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