That divergence ended Monday, Aug. 10, as both declined. UMM was down 1.22% to close at $23.85 and XHB dropped 3.35% to close at $15. These moves basically reversed the correlation divergence experienced last week. Entering an arbitrage opportunity with UMM and XHB at the end of last week could have paid off today for the alert individual investor.
John B. Lounsbury is a financial planner and investment adviser, providing comprehensive financial planning and investment advisory services to a select group of families on a fee-only basis. He worked for 34 years with IBM, and spent 25 years in R&D management and corporate staff positions. He also was a Series 6, 7, 63 licensed representative with a major insurance company brokerage for nine years.

Specific interests include political and economic history and investment strategy analysis. He holds degrees from the University of Vermont, Columbia University and the Illinois Institute of Technology, where he studied chemistry, physics and mathematics. He is a contributor to Seeking Alpha and his own blog, PiedmontHudson.

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