[Hong Jang-won’s Bull & Bear] A market favoring everything except AI... can this trend continue
An independent exercise, not a statement by the video creator or verification of every claim in the video.
Negative correlation can coexist with gains in both assets
Assume hypothetical returns over the same three periods are 1%, 2%, 3% for asset A and 3%, 2%, 1% for asset B. Both assets rise in every period, but their deviations from their respective 2% means move oppositely, giving a sample Pearson correlation of -1. Correlation measures comovement relative to each series’ mean; it does not require one asset to rise and the other to fall every time. For a real chart, first check whether it uses price levels or returns and identify the window and frequency.
Check for yourself
- Are you mistaking negative correlation for returns that always have opposite signs?
- Why would rising correlation have to occur through gains in the asset you favor?
Limits of application
This original example has three hypothetical observations; neither A nor B represents Apple or an actual index. The sample is too small for prediction, and correlation can change across periods. It does not establish causation, persistent diversification benefits or future returns.
- What to look for
- Explore how institutional holdings and relative price behavior shape market narratives through Berkshire and an Apple–Nasdaq comparison.
- Why it matters
- Separate estimated costs, unrealized returns and correlation assumptions when evaluating institutional-following arguments and rebound expectations.
Timeline
3 segmentsThe speaker uses an Apple–Nasdaq correlation chart to question whether preference for Apple over AI-investing firms can persist. Index identity, window, price versus return data and frequency require checking before accepting a first-ever claim; Apple’s official AI announcements also make a simple non-AI label misleading. Higher correlation could arise through AI stocks rising, Apple falling or other paths, so the chart alone cannot determine rebound timing, causation or portfolio changes.