The concept of market relativity is more alive than ever in today’s economy, as gone are the days of individualistic price action in different asset classes and even stocks. With the advances in data delivery and technology, traders across the financial sector have found ways to connect the dots in pretty much all markets, and that is the one thing that these big hedge funds and investment bank traders get right.
By relativity, investors can focus on the shifting preferences between different markets, especially when taking into account what’s considered to be the next best thing. For example, the United States 10-Year Treasury Bond Note Yield is typically considered the “risk-free” rate, the benchmark from which all other yields and potential risks are viewed.
