What is the correlation between the NKD and 6J

[Ronjohn]

Hi,

I have been watching the NKD and 6J for a while. I mostly see them going in the opposite directions. What is the cause for this to happen. They are both closely related i believe. Any insight would be great

Also what is a good strategy for trading both of these futures.

Thanks

 

[JackRab]

Yen goes up, Nikkei goes down... because Japan is an exporting nation. More expensive Yen means less exports which hurts underlying economie.

The swing in de NKD, which is USD-denominated will be less in this case compared to the actual Nikkei... so the correlation will actually be less I assume.

Both futures are completely different though. NKD is equity index and 6J is forex... the only strategy I can think of is if you make assumptions on which level in Yen equals which level in the Nikkei... which is more a gamble then an actual strategy

 

[JackRab]

That said.. the Yen is pretty much driving the index for a while now....

 

[Ronjohn]

Thanks for the information. I really appreciate the reply

 

[JackRab]

The swing in de NKD, which is USD-denominated will be less in this case compared to the actual Nikkei... so the correlation will actually be less I assume.

-edit- Scrap this... since only the market-to-market profit/loss is in USD, not the actual value of the index...