Tuesday, January 02, 2007

Correlation Between Prime Rate and the Dow?


Do you think there is an indirect correlation between the prime rate and the Dow Jones Industrial Average (in other words, do you think that when interest rates goes up, the stock market goes down)? Not from looking at this graph. This tracks the DJIA and the prime since 1955. The only thing close to a correlation that I see is since 1991 there seems to be somewhat of a direct correlation, the opposite of what I would have assumed.

No comments: