Australia's largest stock trading and investment forum Australia's #1 stock forum

XJO

Click for more information

0.83%

8,199.5 s&p/asx 200

We might now have that BHP low in place u mentioned yesterday RB...

First 23 Last

Share
Profile

Follow
jpv

524 Posts.

15/01/16

10:24

Post #: 16801617
Share

Originally posted by redbacka ↑

Hi Kacy,

Should one expect the Australian market and the American market to have a high correlation?

They are two quite different markets.

Australia is heavily tilted to Financials (nearly 50%) and Materials about 14%. Information Technology is a miniscule 0.8%.

In America, Information Technology is the largest sector 20.7% if the SP500. Financials make up 16.5%. Materials make up just 2.8%.

I can see no reason for thinking that there would be a high correlation between these two markets.

Over the past 30 days (Macro Axis), the correlation between the XJO and the SP500 has actually been slightly negative -0.14.

I keep a measure of the correlation for IOO (the ETF for American stocks in Oz Dollars on the ASX). Its very long term correlation is 0.026, i.e., virtually zilch.

The only reason to watch the American market is to see major turning points. These often have a big effect on our market.

But expecting a correlation in trends on a short term basis is likely to be an exercise in futility.

RB

Expand

We might now have that BHP low in place u mentioned yesterday RB even if artificially-sentiment counts $$.
Anyway I just had to say yabba dabba do..
1 Upvote

0 Great analysis

Reply

Top Stories

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

SI6

Nanocap Si6 Metals to kick off drilling at Monument gold project WA, chasing past hits

LRD

Lord picks up high-grade copper play in Western Australia, with past intercepts of up to 6.62%

Bitcoin jumps 8% to beat record on Trump vote optimism

Palladium's the newest geopolitical hot commodity. But ASX exposure is limited

There are more pages in this discussion • 82 more messages in this thread...

First 23 Last

Add XJO (ASX) to my watchlist