Dispersion trading is a leading strategy for trading correlations in the market. As stated previously, typically, the expected correlation between stocks, or implied correlation, tends to be overvalued. This is often due to the market positioning of structured product sellers who have a vested interest in going long correlation. thetatitans.com/home/dispersion-trading/ This overvaluation makes the implied volatility of indexes appear higher than it actually is when compared to the volatility of individual stocks.