CRE debt and equity have historically offered meaningful diversification benefits, even relative to other private markets.
authors
Christopher Bole
Christopher Bole
Vice President, Financial Writer
Asset class return correlations (Based on quarterly total returns, 2013–2025)
Chart showing correlations across private and public asset classes. Real estate equity and credit stand out for their historical diversification benefits.
Source: Preqin, Pitchbook, Cliffwater, NCREIF, Bloomberg, as of December 31, 2025.
  • Diversification is one of the primary reasons investors have allocated to private markets.
  • That benefit may be particularly valuable today as investors reassess the durability of the AI-driven market rally and stock-bond correlations remain elevated.
  • Private markets have historically provided meaningful diversification to traditional stock and bond portfolios. Even among major alternative asset classes, real estate equity and real estate credit stand out for their comparatively low average correlations.
  • Real estate credit shows almost no correlation to direct lending. At a time when investor exposure to private corporate credit has become increasingly concentrated, CRE credit may offer meaningful diversification within broader private credit portfolios.

This week’s chart is drawn from the Q2 2026 Mapping the Markets: Shocks and Awe, a quarterly chartbook from Future Standard’s Investment Research team showcasing the most important trends shaping the public and private market landscape.

contributing authors
Christopher Bole
Christopher Bole
Vice President, Financial Writer
footnotes + disclosures

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