That is possible. However, I would also say that what you are seeing isn't really a correlation. The Mexican Peso is highly volatile. There are many currencies that are highly volatile, the South African Rand, the Indian Rupee, the Hungarian Forint. Many many minor currencies have massive fluctuations. The Swedish Krona will regularly move 700 or so pips in one direction and then within a couple of hours reverse the move entirely! That is 1400ish pips of movement in one day. Regularly!
Try the SA Rand against the USD. Woh... It is often 2000 pips in one day. My broker gives me a spread of 80 pips on the USDZAR!!! And that is nothing compared to how much it moves.
These are not really correlations with the vix. They are simply highly volatile currencies, it is not quite the same thing. Going out on a limb here as I obviously haven't checked, but pull up a vix chart and overly any of these currencies and I am not sure you will see a correlation. You might see that as the vix increases, vol also increases in a particular currency. But that is what the vix is measuring - S&P volatility, which is a gauge of general market vol.
Just my midnight thoughts...
J
UsdMxn and Vix: a positive correlation that has lasted for several months. If we bet on the explosion of the volatility, then we might sell Mxn.
The volatility of USDMXN is at its lowest in recent months, just like the Vix. The positive correlation exists and overlaying USDMXN and Vix we can notice the perfect synchronicity of the movement. USDZAR instead is no longer related to the Vix.
Interesting screenshot. I don't know why our charts look so very different.
Like I said though, if you trade the USDMXN based off a correlation with vix, then well done, good for you...
J
I think that in order to get an efficient portfolio, you could buy the S & P500 selling Mxn, an alternative idea of hedging against adverse market movements.
hey all
busy busy busy this morning since dawn.......will get on line at some point with charts
later
N
Looking for a list or diagram that lists all the global financial markets correleations with the euro? I understand they change hourly/daily however the common movement we expect?
Beware ....
Gold under attack again......USD following south (so far) so the effect is not so profound on XAUUSD
you have been warned goldbugs
N