In this episode of the Ardea Alternative, Tamar Hamlyn and Alex Stanley talk to Dr Laura Ryan about her research paper titled "Bonds don't need to be negatively correlated with equities".  You can find the paper published in the Journal of Investing here or on the Ardea website here.  The research tells us that bonds will continue to lower portfolio volatility if bond volatility is lower than equity volatility, even if the correlation is positive. While better outcomes can be achieved under negative correlation, this is secondary to the impact of relative volatility.