Re: Correlation between real estate and stock market
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Your original premise was this...
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A common sense idea is that when people have extra money to invest, they have two main choices: stock markets or real estate. Given that people are tending to make either/or choices, when one is hot, the other should cool, and vice-versa.
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Your premise is flawed because these are not the only two choices that people make as to where they should invest their money, as I detailed...
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Obviously I know there are more than two, but it's still a legitimate question as to whether there is enough of counter-flow to produce a negative correlation.
As I also pointed out before, volume in FOREX could be entirely irrelevant, for example if FOREX trading is independent of stocks or real estate markets.
I'll take a look at the links.
eastbay
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