Many people, myself included“If the yen depreciates, the Nikkei Average will rise,” “at least it won't fall,” “large export stocks will rise.”I think that's the perception.
But here tooI need a mindset changeI would like to confirm the story that we are in such a situation... while looking at the chart.
This is a chart of the correlation coefficient between Nikkei futures and the dollar and yen.
As the name suggests, the correlation coefficientThe state of correlation between the twoIt represents,1.0 is the max and 1.0 is fully correlated. -1.0 for perfect inverse correlation, and 0 for no correlationIt will be.
Perfect correlation means that if A goes up, B always goes up, or if A goes down, all B also goes down.
Whether the stock price rises or falls, if both sides move in the same direction, the correlation coefficient will be positive, so it's easy to get confused when stock prices are falling.
On the other hand, when the correlation coefficient is negative, it is called inverse correlation, and if A goes up, B goes down, and if A goes down, B goes up... it's the exact opposite of both.
Also, 0 (zero): The yellow dotted line shows “no correlation,” although the image is a bit more confusing.
As the name suggests, this shows that there is no correlation between the movements of A and B...