The study shows that currency and stock market movements can be predicted by different types of risk premiums. Currency variance risk premiums can predict currency appreciation over 6 months, while stock variance risk premiums can predict stock market movements over 1 month. These risk premiums are not strongly correlated with each other, suggesting they are separate phenomena. Interestingly, currency risk premiums do not predict stock returns. The researchers explain these findings using a model that considers local and global economic uncertainties, showing that currency uncertainty affects stock returns in different ways.