I recently read an article which highlighted that a weaker dollar tends to coincide with rallies in Hong Kong stocks. I did some quick analysis:
I calculated monthly returns on the Dollar Index and Hang Seng Index (from Dec' 14 to Dec' 17) and plotted a 6-month rolling correlation. The correlation tends to be between -0.15 and -0.9. More often that not, it's below -0.5.
My question is simple: What's the explanation behind this negative correlation between the two?