A Study on the Relationship between the Stock Market and Exchange Rate Correlation and Leading and Lagging

In this study, we want to understand the correlation between the stock market and the exchange rate of Brazil. We use the Brazil stock market and exchange rate information, and the empirical results using wavelet analysis are as follows: 1. Brazil's stock price index and exchange rate have a significant linkage relationship, whether in the short-term (1-4 years) or long-term (4-8 years) There is a significant correlation period (correlation coefficient > 0.8).In the short-term, there is frequent linkage (the island block is small), and in the long-term (4-8 years), a large red area (the island block is large) appears, indicating a significant year-long correlation.In the long-term (4-8 years) financial crisis period, the correlation has a significant impact. 2. in the short-term (1-4 years) linkage relationship: the exchange rate and the stock price index are positively correlated (the two are different in leading and lagging) and often have complete covariance. 3. in the long-term (4-8 years) linkage relationship: Except for the negative correlation of the exchange rate leading the stock market from 2002 to the end of 2003, the other sample periods are all positive correlation, and the exchange rate rises (depreciates) and the stock market rises (falls).