Are You a Visual Learner?
Do you tend to absorb and retain information more effectively through visual content?
If that’s the case, great news—we’ve got just the thing for you!
Take a look at the tables below. Each one illustrates the correlation between a major currency pair (highlighted in orange) and other currency pairs (in white) over different timeframes.
Understanding Currency Correlation (With a Visual Twist)
Currency correlation is represented as a correlation coefficient, a value ranging from -1.00 to +1.00 that measures the strength and direction of the relationship between two currency pairs.
What Is a Correlation Coefficient?
A correlation coefficient is a statistical measure that shows how closely two variables move together.
-
Strength: How strongly the two variables (currency pairs) are connected.
-
Direction: Whether they move in the same direction (positive correlation) or in opposite directions (negative correlation).
Coefficient Scale
-
+1.00 (Perfect Positive Correlation): Two pairs move in the same direction 100% of the time.
-
-1.00 (Perfect Negative Correlation): Two pairs move in opposite directions 100% of the time.
-
0 (No Correlation): Movement of one pair has no predictable effect on the other.
Example: If EUR/USD and GBP/USD have a correlation close to +1, when one rises, the other is likely to rise as well. On the other hand, if EUR/USD and USD/CHF have a correlation near -1, when one goes up, the other is likely to go down.
Keep in mind: Correlation doesn’t mean causation. Just because two pairs move together doesn't mean one causes the other to move.
How This Helps Traders
Knowing how currency pairs are correlated can:
-
Help you avoid overexposing your account to the same market movements.
-
Improve your risk management when trading multiple pairs at once.
-
Reveal new trading opportunities by understanding relationships between currencies.
Sample Currency Correlation Tables
Each table below shows the correlation between the selected currency pair (left column) and other major pairs across different timeframes: 1 week, 1 month, 3 months, 6 months, and 1 year.
Tip: Use the data to guide your position sizing, avoid conflicting trades, or even find hedging opportunities.