There Be No Stockpicking Here

Source:  Birinyin & Associates

The S&P 500 realized correlation is very high.

Implications:

1) Idiosyncratic features shouldn't currently be the driver of your equity selections - you might as well index.

2) Equity market is at heightened risk for an across-the-board tail event...be it the positive or the negative tail.

3) Equity long-short strategies (executed on S&P 500 names) will have convergence troubles.  If you are going to insist on directionless strategies, do it through options and earn some vega points.

4) Dispersion traders should be eating well.

5) The risk-on/risk-off/risk-on/risk-off saga continues...