The crisis in Greece for the last several weeks has greatly affected the Euro and the USD. Below are the correlations of all currency ETFs for the period March 1 to April 30 2010. Correlations are essential for proper diversification.
In order to properly diversify, investors should look for uncorrelated ETFs, those with correlation values close to 0 above.
Some of the best and most interesting pairs are:
- UDN (inverse US dollar), and also UUP with GBB (pound)
- XRU (Ruble) and ERO (Euro)
- JYN (Japan) and FXF (Swiss Franc)
- UDN and CEW (emerg. currency)
- INR (Rupee) and CYB (Yuan)