Lower Correlations

The lockstep moves in global stocks that dominated markets for the past six years are breaking down at the fastest rate on record, another sign investor confidence is returning after the 2008 financial crisis.

A measure of how much the 2,073 companies in the FTSE All- World Developed Index swing in unison dropped 31 percent in the six months through Jan. 25, the biggest retreat since at least 1993, according to data compiled by Societe Generale SA and Bloomberg. The indicator ended December at the lowest level since 2007.

Diminishing correlation was a buy signal in 1998 and 2003 and has coincided this year with the strongest January rally for the S&P 500 Index since 1997, according to data compiled by Bloomberg.

‘Diverse’ Drivers

Long-short equity funds, whose managers can bet on and against stocks, rose 1.3 percent in January. Multistrategy funds climbed 0.5 percent and macro funds, whose managers make investment decisions based on their reading of economic and political events, fell 0.1 percent.

“We are encouraged by the fact that return drivers were diverse in January -- not just long equities,” Anthony Lawler, portfolio manager at GAM in London, said this week in a commentary. “Several global macro managers held on to the short Japanese yen trade, and also profited from the selloff in safe- haven rates. Relative-value managers delivered strong performance from long residential mortgage positions and other credit longs even as safe-haven bonds sold off.”

Cohen’s SAC Capital International increased 2.5 percent last month, said a person with knowledge of the matter who asked not to be identified because the fund isn’t public. The fund is run by SAC Capital Advisors LP, the $14 billion Stamford, Connecticut-based firm that was notified in November by the U.S. Securities and Exchange Commission that it may be sued for insider-trading fraud.

Jana, Paulson

Jana Partners LLC’s Jana Partners fund rose an estimated 5.1 percent last month, according to a performance update to investors, a copy of which was obtained by Bloomberg News. The $4 billion New York-based firm’s Jana Nirvana fund returned an estimated 7.5 percent in January, Jana said in the update. Barry Rosenstein is the firm’s managing partner and co-portfolio manager, along with David DiDomenico.