Correlation amongst asset classes Part 2

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Correlation - Positive or Negative is more effective if you see it on the chart, for that it is imperative that you compare two asset classes of your like.

I have come up with some charts where I have two different asset classes moving either in sync or inverse with each other.

MCX Crude and Nifty- Positive Correlation


In the above chart, the blue line is the Nifty Index and the purple line is MCX Crude Oil placed on a weekly chart. This is how MCX Crude Oil bounced after going negative and Nifty bounced after hitting the pandemic low last year.

Gold and DXY- Negative Correlation


As shown in the above chart, Gold is shown in the blue line and DXY in the purple, both are moving against each other giving an indication that both are inversely related.

US Interest Rates and S&P500 - Negative Correlation


Historically, Equities have been moving up after the end of subprime crisis, this is because the interest rates were dragged down by the FED just before the crisis. As and when the interest rate has gone down equities have climbed to record high.

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