By: Alex Krasikov, Economist, Americas Research, Econometric Advisors and Jing Ren, Ph.D., Economist, Americas Research, Econometric Advisors

How and why real estate markets move in sync with one another is highly relevant in portfolio diversification. Our June correlation study showed that the co-movement of U.S. markets fluctuates based on the economic cycle. In this follow-up, we look at why markets correlate strongly or weakly, testing a number of economic variables for their influence.