Many people, including myself,"If the yen weakens, the Nikkei Average will rise," "At least it won't go down," "Export-intensive large cap stocks will rise."It seems that this is the perception.
However, even hereA change of mindset is necessary.I would like to confirm the situation that I heard about while looking at the chart.
This is a chart of the correlation coefficient between Nikkei futures and USD/JPY.
The correlation coefficient, as the name suggests,represents the correlation state between the two.At 1.0, it represents perfect correlation. At -1.0, it represents perfect inverse correlation, and at 0, it represents no correlation.Perfect correlation means that if A goes up, B is also always going up, or if A goes down, B is also going down.It will be.
If A goes up, B is also always going up, or if A goes down, B is also going down.
Whether the stock price goes up or down, if both move in the same direction, the correlation coefficient will be positive, so it is easy to get confused when the stock price is falling.
On the other hand, when the correlation coefficient is negative, it is called inverse correlation, which means that if A goes up, B goes down, and if A goes down, B goes up, resulting in opposite movements between the two.
And, 0 (zero): the yellow dotted line represents "no correlation", which is a bit confusing to imagine.
This is a table which shows that there is no correlation between the movements of A and B, as the name suggests...