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Market Volatility Meets Dispersion: Insights from Breadth in S&P 500 Returns

Dec 4, 2024

Dispersion Stabilizing: Broadening Equity Trends

The S&P 500 Dispersion is signaling a notable shift in market dynamics. While broader participation initially benefits equal-weighted strategies, high dispersion increasingly signals outperformance of market-cap-weighted indices like the S&P 500. However, extreme dispersion levels historically suggest potential volatility ahead, with implications for both equal-weighted and market-cap-weighted strategies.

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