Wednesday, January 6, 2010

Proper Diversification From The US. Dollar With Global Currency ETFs

The US dollar continues to act very weakly. There are many global currency ETfs available on the market today that make it very easily for an investor to diversify by very easily switchng to foreign currencies.

Investors should be wary of diversification by using correlations. There is no point in investing in several currecnies that are highly correlated, either positively or negatively.We compiled the correlations of all currency ETFs and ETNs in the U.S markets. Below is the color-coded chart. Green or red indicate very high correlations, either positive or negative, either is bad.

(please click to enlarge)

So what currency ETFs are not correlated?

CNY (Remnibi) and AYT, BZF (Brazilian real), CEW (emerging), FXC (Canada)

DBV (G10) and CYB (Yuan)

FXC and FXB (Brittish)

FXM (Mexican peso) and BNZ (New Zealand dollar)

FXY (Yen) and CYB


You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO). Please do your own due dilligence.

These are the ETF names:

* SCR used to be Swedish Krona.

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