Trader William Lawrence works on the floor of the New York Stock Exchange, Thursday, Nov. 8, 2018. (AP Photo/Richard Drew)
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Investors hope the split between Republicans and Democrats controlling the U.S. Congress will open up opportunities to pick new winners and losers because some government policies will be harder to predict.Correlations between stocks and sectors were high in the run-up to Tuesday's congressional elections, meaning investors have been either dumping or buying all kinds of unrelated stocks at once.Some funds have been damaged in what is a tough market to be a stock picker.Stocks rallied Wednesday, but one Cboe S&P 500 Implied Correlation Index .ICJ was down more than 9 percent and another .JCJ was flat.Correlations between stocks and sectors bottomed in September but spiked in October.So long as markets focus on more parochial issues instead of trade and monetary policy the implications for stocks could be positive going into next year, investors said.Low correlations between stocks typically also mean lower volatility for the market overall.
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