Investing · General financial education

How holdings move together

Co-movement describes whether two holdings rose and fell together in a period you look at. Investor.gov uses that for the question of whether losses can offset each other.

In more detail

The agency writes that factors or market conditions that cause one asset class to perform poorly may improve returns for another. Spreading money can therefore offset a loss in one category with another. That describes past windows, not a promise for the next one. Finmon states no correlation figure.

Background

Read next to risk, the limits of diversification and asset classes: many holdings that do the same thing do not offset each other. The documents and the largest positions show that better than the number of funds.

An example

Two funds hold the same heavy single names. If those names fall, both funds fall together. A second wrapper did not remove the co-movement. Finmon does not say which mix you should hold.

A common misconception

Many funds automatically mean they offset each other in a loss.

An offset requires that the holdings do not do the same thing. The same heavy names move together, even inside two wrappers.

Source: Investor.gov · Asset allocation. Last reviewed: 2026-11-01. Editorially reviewed on 2026-11-01. Next review 2027-11-01. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.