Correlation Matrix

Understand how currency pairs move in relation to each other

Correlation coefficients between currency pairs

Strong Positive (+0.8 to +1.0)

Moderate Positive (+0.5 to +0.8)

Weak/None (-0.2 to +0.2)

Moderate Negative (-0.8 to -0.5)

Strong Negative (-1.0 to -0.8)

What is Correlation?

Correlation measures how two currency pairs move in relation to each other. The correlation coefficient ranges from -1 to +1:

Trading highly correlated pairs simultaneously increases your risk. If EUR/USD and GBP/USD both move against you, losses compound.

Negative correlations can be used to hedge positions. When one pair moves up, the other tends to move down.

Choose pairs with low correlation to spread risk across truly independent market movements.

Positive Correlations

Negative Correlations

Key Drivers