Proper Investment Diversification Through Correlations of Popular Stocks and ETFs

With April, ending, we can compute the correlations for the period March - April 2010, as we do at every end of month. Correlations are essential for proper diversification of investments.

Here they are:

For diversification we look for uncorrelated stocsk, those whose valeus above are clsoe to zero. They are marked in bold.

Best uncorrelations:

There are a few very interesting pairs.

• SPY and GS
• GS and VXX (volatility), and ECH (Chile)
• UUP and BZF (US dollar and Brazilian real)
• UUP and USO (US dollar and oil)