the currency allocation with regards to i.e. dollar return in the japan index minus the yen return in the index, how are these calcs done. i have been struggling with this. example: european index return in euros is -5% but euro strengthend towards dollar from 1 euro per dollar to 0.98 euro per dollar. so the european index return is -3.06% in dollars, and the currency contribution is +1.94% = -3.06% -(-5%) how do i calcualte 3.06%? thank you!
Take the beginning Euro index and convert it to dollars using the appropriate FX rate. Take the ending Euro index and convert it to dollars using the appropriate FX rate. The change in value is the change in dollar terms. Currency contribution is the difference between the index return measured in dollars versus the return measured in euros.
Whoah Deja Vu