Indices › Correlation
Hedge fund research
Are hedge funds correlated with the stock market?
Yes, and the gap between the two windows is the finding. The PivotalPath Composite Hedge Fund Index correlates at 0.77 to the S&P 500 over the trailing ten years, against 0.62 since January 2000 — the market relationship has strengthened, not stayed fixed.
Correlation to the S&P 500, as of August 2026.
Managed Futures and Volatility Trading are the real diversifiers, at 0.03 and -0.39 correlation to the S&P 500 over the trailing ten years. Everything else shown below, including strategies sold as market-neutral, carries real equity beta.
Composite correlation to the S&P 500
| Window | Correlation | Months |
|---|---|---|
| Trailing 10 years | 0.77 | 120 |
| Since January 2000 | 0.62 | 320 |
36-month rolling correlation of the Composite to the S&P 500, 2002-12 to 2026-08. Correlation sat near zero through 2003, rose sharply across 2008, and has not returned to pre-crisis levels.
Correlation by strategy
| Index | Corr. to S&P 500 | Corr. to Composite |
|---|---|---|
| Credit | 0.56 | 0.83 |
| Equity Diversified | 0.88 | 0.95 |
| Equity Market Neutral | 0.54 | 0.80 |
| Equity Quant | 0.41 | 0.35 |
| Equity Sector | 0.76 | 0.83 |
| Event Driven | 0.76 | 0.95 |
| Global Macro | 0.22 | 0.61 |
| Managed Futures | 0.03 | 0.29 |
| Multi-Strategy | 0.51 | 0.90 |
| RV | 0.51 | 0.87 |
| Volatility Trading | -0.39 | -0.31 |