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When you first start in currency trading, you may be unaware that some currency pairs seem to move in opposite directions. Understanding and using t

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

he relationship of pairs to one another is crucial to your long term success in the market. Many traders are simply unaware of these relationships,

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

and wonder why their trading positions remain static or hugely negative when they have several open positions. The reason is simple – it is called c

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

orrelation.

Correlation has two aspects as data pairs can either correlated inversely or directly. If two data sets are perfectly correlated in an

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

nverse relationship, then the correlation factor is -1. In other words for a unit of movement up by one data set, then the other data set will move

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

down by one. The closer data sets are to the factor being one ( or minus one) then the closer they are correlated. If two data sets are directly c

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

orrelated, then as one data set moves by one unit, then the other will move in the same direction by the same amount.

I do not propose to explain t

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

he maths of calculating the values, but it is important when trading, to understand these relationships between currencies. I is also important to a

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

preciate that whilst two pairs may relate to one another over a period of a few hours or days, this does not necessarily mean that this will continu

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

e for weeks or months. Various factors may affect this relationship where the correlation value falls or becomes meaningless. As a rule of thumb, if

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

this is below 0.85, then the relationship has less meaning.

So how do I use this information in my trading? In currency trading these relationship

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

s are important for two reasons. Firstly it allows you to identify pairs which can be used to hedge a trading position, and secondly (which is the c

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

nverse of this I suppose), you do not want to open directional trades and suddenly find that you have two trades which are hedging one another and t

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

herefore not going in any direction at all!! Those currencies which tend to correlate quite well are GBP/USD and EUR/USD which correlate positively,

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

and the USD/CHF which correlates negatively, particularly with the EUR/USD.

If a pair correlates perfectly and is a direct relationship then buyin

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

g one and selling the other will work as a hedge ( in the same quantities ) For example, suppose we think the EUR/USD is going up, this implies that

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

the USD/CHF is going down. If we bought 5 contracts of the first pair and sold 5 contracts of the second, if they were in perfect inverse correlatio

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

n, our balance would stay much the same. In order to make money, we could therefore decide to weight our decision, but still use a hedge. By buying

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

5 contracts of the first pair as before, but only selling 3 of the second, we still have a hedge if it all goes wrong, but we have weighted our deci

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

sion by 2 contracts on the EUR/USD going up.

Using hedging and correlation is a powerful way to spread and manage the risk in your currency trading

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Expanding your company to a new city is a giant step. There are many important decisions to make about your location, employees, financial needs and how you will best benefit your clients. If your remote employees will be working from home or their cars for the most part, you can provide them with access to a local branch of your company without paying high rent or buying expensive office equipment.

Customer service is important in any type of business and is also important in private education. Customer service in public schools is nonexistent compared to that of the average business. In a private school, which is often run very similar to a business they need to be cognizant of the fact that community goodwill, public-relations and great customer service is paramount in their success.

The customer is king/queen. We have all heard this mantra. It’s up to you, the supplier, to prove it so. With these ten tips you will be a lot closer to proving that you are on top of industry trends and technologies for the packaging industry.

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Answers - Using Correlation In Currency Trading

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