Skip to main content

Cookie preferences

We use cookies to keep the site working (necessary). With your consent, we may also use analytics cookies to understand usage and improve the site.

Necessary cookies
Required for security and core site functionality.
Always on

You can change this later in the footer via "Cookie settings".

Back to Glossary
Risk Management

Correlation

How closely two currency pairs move in relation to each other.

Full Definition

Currency correlation measures how pairs move relative to each other, ranging from +1 (perfect positive) to -1 (perfect negative). EUR/USD and GBP/USD often have positive correlation (move together), while EUR/USD and USD/CHF typically have negative correlation (move oppositely). Understanding correlation helps avoid overexposure to similar trades.

Related Terms

HedgingDiversification
Learning Progress
38/104 terms viewed37%