PE, correlation w/public equities public, returns, benefit, because, positive

Muddahudda

(1) Private equity returns vs. (2) public equity returns... my notes are contradictory:

- (1) has a low correlation with (2), when measured with short-term returns
- (1) has strong positive correlation with (2), when measured with less-frequently-measured returns

So, I would conclude that PE doesn't have much diversification benefit? because high positive correlation with public equities

Thoughts?

liangfeng

yes PE do not have high diversificatiom benefits but can provide you return more than stocks and bonds

IAmNeil

thx pupdawg.. makes sense

wake2000

Looking over my notes and I have PE having a high correlation with equity markets since you are buying and selling companies at any given point in that market but it being a very good return enhancer for those with higher risk tolerance and longer time horizons.