Risk on, Kiwi is favored. Risk off, Yen is favored. Walla! You have a good cross to short if you're bearish (like me) on the S&P 500. I have not done any correlation analysis nor do I care to.
P.S. IN THE LONG TERM THERE IS PROBABLY VERY MILD CORRELATION BETWEEN THE NEW ZEALAND DOLLAR AND THE MARKET AS A WHOLE. IN THE SHORT TERM, HOWEVER, IT'S SUBSTANTIAL ENOUGH. IN FACT, NEARLY ANY CURRENCY AGAINST THE YEN IS A SHORT IF THE MARKET GOES DOWN BECAUSE OF THE FLIGHT TO SAFETY COMPONENT (YEN).
I choose New Zealand because it has a nice enough pattern for my strategy. On another note, New Zealand dollar is highly correlated with milk - so it's a bearish China play as well - which I am bearish on! (China is New Zealand's largest importer of milk powder).
P.S. IN THE LONG TERM THERE IS PROBABLY VERY MILD CORRELATION BETWEEN THE NEW ZEALAND DOLLAR AND THE MARKET AS A WHOLE. IN THE SHORT TERM, HOWEVER, IT'S SUBSTANTIAL ENOUGH. IN FACT, NEARLY ANY CURRENCY AGAINST THE YEN IS A SHORT IF THE MARKET GOES DOWN BECAUSE OF THE FLIGHT TO SAFETY COMPONENT (YEN).
I choose New Zealand because it has a nice enough pattern for my strategy. On another note, New Zealand dollar is highly correlated with milk - so it's a bearish China play as well - which I am bearish on! (China is New Zealand's largest importer of milk powder).
