Correlation Matrix

A correlation matrix is a tool that shows how currency pairs move in relation to each other. Values range from +1 (move together) to -1 (move opposite). Our correlation matrix helps traders diversify portfolios, avoid over-exposure, and identify hedging opportunities.

Correlation is calculated using the Pearson correlation coefficient on price changes over a period. Formula: r = Σ[(x-x̄)(y-ȳ)] / √[Σ(x-x̄)² × Σ(y-ȳ)²]. Our correlation matrix computes this automatically for all major pairs across multiple timeframes.

Our correlation data is calculated from real-time forex prices provided by Massive.com, which sources data directly from major exchanges. Our correlation matrix is updated every 60 seconds during market hours.

Both pairs have USD as the quote currency. When USD weakens, both EUR/USD and GBP/USD tend to rise. The European and UK economies also have strong trade ties. Our correlation matrix typically shows +0.80 to +0.90 correlation between these pairs.

EUR/USD has USD as quote currency, while USD/CHF has USD as base. When USD strengthens, EUR/USD falls but USD/CHF rises - hence the inverse relationship. Our correlation matrix typically shows -0.85 to -0.95 correlation between these pairs.

Yes! Correlations are not fixed. They can shift during major economic events, policy changes, or market regime shifts. Always check current correlations before trading. Our correlation matrix offers multiple timeframes (1H to 1M) to see how correlations evolve.

If you're long on EUR/USD, a position in USD/CHF (negatively correlated) can act as a hedge. If EUR/USD drops, USD/CHF typically rises, offsetting some losses. Use our correlation matrix to find pairs with -0.80 or stronger negative correlation for effective hedging.

For diversification, look for pairs with correlation between -0.30 and +0.30 (uncorrelated). Trading highly correlated pairs (+0.80 or more) is like doubling your exposure. Our correlation matrix highlights uncorrelated pairs that are ideal for diversification.

Not necessarily, but be aware that trading two pairs with +0.90 correlation is similar to doubling your position size. If you trade both EUR/USD and GBP/USD long, reduce position sizes or treat them as one trade. Our correlation matrix helps identify these situations.

Green cells indicate positive correlation (pairs move together), red cells indicate negative correlation (pairs move opposite), and gray/neutral cells show low correlation. Darker colors mean stronger correlation. Use our correlation matrix heatmap to quickly scan all pair relationships.