Correlations of Global ETFs in 2010; Best Picks: Canada, Turkey, Israel, Japan

Now these are the correlations, again for January and February of 2010, of all global ETFs.

(please click to enlarge)

Note that the chart is a sea of green, which indicates extremely high correlations, with the exception of FXP, which is an inverse, and therefore still correlated. This is very scary. I have never seen this much green before. There are no really great uncorrelated pairs in this case. Some of the best pairs are:

• PJO and EWC (Japan and Canada)
• PJO and EIS (Japan and Israel)
• TUR and EWC (Turkey and Canada)

In order to properly diversify what an investor should seek are uncorrelated stocks. In other words, the greens and reds above are bad as theu indicate correlations over 0.85 and under -0.85.

Note: 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 diligence. This is not advice. Options are very dangerous and may cause 100% loss.

Computed with StraddlesCalc Tool