Invest Without Emotions
No.
Regular viewers of CNBC might have heard the refrain that “IT stocks went up because the rupee went down.” But it turns out that it is the classic case of the journalist/reporter/anchor going in search of a reason to explain a random market event. If there is such a correlation, then a scatter plot of USDINR returns vs. CNX IT index returns should unearth it.
Weekly:
Daily:
As you can see, there is no obvious link between USDINR and technology stocks. But what if the effect manifests after a lag?
Weekly:
Daily:
Currency moves alone cannot be your go-to explanation for fluctuations in tech stocks.
