Find the correlation between any two forex pairs or instruments. Understand how pairs move together to avoid doubling your risk or accidentally hedging your trades.
select two pairs
First pair
Second pair
⚠️ Correlations are based on historical averages and are not live data. They drift over time with macro conditions — treat this as a directional guide, not an exact current figure.
Correlation
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Strength
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Trading Implication
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Full breakdown (click to copy)
Trading Decision
Strong positive correlation = one bet, not two
If two pairs move together 70%+ of the time, holding both long is close to doubling your exposure to the same underlying move — size each position smaller, or pick one.
Strong negative correlation can hedge or cancel
Pairs that move in opposite directions can partially offset each other's risk — useful intentionally as a hedge, but a problem if you didn't realize two "different" trades were actually one net position.
Correlation drifts — recheck periodically
This data is a historical snapshot, not live. Central bank policy shifts and changing market regimes can move correlations meaningfully within months — don't treat any single value as permanent.
➜ Next step: If correlation is high, review your total exposure with the Margin Calculator or Leverage Calculator before adding a correlated position.
How to Use the Currency Correlation Calculator
Select your first pair — choose the currency pair or instrument you are planning to trade or currently hold.
Select the second pair — choose another pair to compare correlation with your first selection.
Read the correlation value — values range from -1.0 to +1.0. The calculator instantly shows strength, direction, and risk implications.
Review the full correlation table — the bottom section shows how your first pair correlates with all 13 major instruments, sorted by correlation strength.
Apply to position sizing — if correlation is above 0.7, halve your position size on any second correlated trade to maintain your intended total risk exposure.
🔑 Key rule: If you hold EURUSD long and want to also go long GBPUSD (correlation 0.89), you are effectively doubling your USD short exposure. Either skip the second trade or halve both positions. This single insight prevents one of the most common hidden risk errors in retail trading.
Understanding Currency Correlation
Currency correlation measures how closely two pairs move in relation to each other over a given time period. A correlation of +1.0 means the pairs move in perfect lockstep. A correlation of -1.0 means they move in exactly opposite directions. A correlation of 0.0 means no relationship.
+0.7 to +1.0 Strong Positive
Pairs move in the same direction most of the time. Trading both in the same direction doubles your actual exposure. Examples: EURUSD/GBPUSD (0.89), AUDUSD/NZDUSD (0.92), EURJPY/GBPJPY (0.88).
-0.7 to -1.0 Strong Negative
Pairs move in opposite directions. Going long on both effectively creates a partial hedge — they cancel each other out. Example: EURUSD/USDCHF (-0.93). Going long EURUSD and long USDCHF almost neutralises both positions.
0.0 to ±0.3 Low Correlation
Pairs are largely independent. Trading both is genuinely diversified exposure. These combinations are rare in major forex — most major pairs share USD as either base or quote, creating inherent correlation.
±0.3 to ±0.7 Moderate
Partial relationship. Correlated in the same macro direction but with enough independence for both positions to add value. Can be traded simultaneously with normal sizing, but monitor total USD exposure.
⏱️ Time-Varying
Correlations are not fixed. They change with market regimes, central bank policy changes, and risk-on/risk-off environments. The values shown are approximate 3-month historical averages.
📊 Practical Use
Use correlation to: 1) Avoid doubling risk, 2) Find genuine diversification, 3) Identify hedging opportunities, 4) Confirm breakouts (if EURUSD and GBPUSD both break a level, signal is stronger).
Using Correlation in Prop Firm Trading
The hidden risk problem
The most common hidden risk error in prop firm trading is holding multiple highly correlated positions and believing your risk is diversified. A trader long 1 lot EURUSD, 1 lot GBPUSD, and 1 lot AUDUSD with 1% risk each has an actual correlated USD exposure far greater than 3%. If USD spikes strongly (common on NFP, FOMC announcements), all three positions move against simultaneously, creating a drawdown 3× larger than any single position would suggest.
The diversification benefit
True diversification in forex requires choosing pairs with low correlation. EURUSD (correlation with USDJPY = -0.82) and USDJPY in the same direction is better diversification than EURUSD and GBPUSD. Adding Gold (XAUUSD, correlation with EURUSD = 0.65) adds some diversification while staying in familiar instruments.
Correlation-adjusted position sizing
A simple rule: if correlation between two positions is above 0.7, treat them as a single position for risk management purposes. If you want 1% risk per position, use 0.5% on each correlated pair. This maintains your intended total exposure while preserving both trading opportunities.
News event correlation spikes
During major news events (Fed decisions, NFP, CPI releases), correlation between USD pairs temporarily increases toward 1.0 or -1.0 as all pairs react to the same USD shock. Be especially careful holding multiple positions through major news — the correlation risk is at its maximum exactly when market moves are at their largest.
🎯 Simple correlation rule for prop firms: Never have more than 2 highly correlated positions open simultaneously. If you must trade correlated pairs, cut each position to 0.5% risk instead of 1%. Total USD exposure should never exceed 2% of account across all correlated positions combined.
Correlation Formula
Correlation Coefficient (r) ranges from −1 (perfectly opposite) to +1 (perfectly together), measuring how consistently two instruments' price moves track each other over a given period.
Worked example
EUR/USD and USD/CHF show a correlation of −0.93 — near-perfect opposite movement, because CHF and EUR both trade heavily against USD from opposite sides. Going long both effectively creates two nearly offsetting positions rather than two independent trades.
Assumption: this calculator uses a static historical dataset, not a live-computed rolling correlation — treat the exact figure as a directional guide rather than today's precise value.
Avoid These Mistakes
Assuming three "different" trades are diversified
Three highly correlated pairs traded the same direction behave as one large position, not three independent ones — size accordingly.
Treating correlation as fixed
Correlation shifts with macro regime changes and spikes toward ±1.0 during major news events — a value from calmer conditions can understate real-time overlap during high volatility.
Ignoring negative correlation as "safe"
Strongly negative correlation isn't automatically risk-free — it can silently cancel out an intended directional bet if you didn't mean to hedge.
Checking correlation after entering, not before
Reviewing correlation once positions are already open limits your options to closing rather than sizing correctly from the start.
Frequently Asked Questions
What is currency correlation?
Currency correlation measures how two pairs move relative to each other, on a scale of −1 to +1. +1 = perfect positive (move identically). −1 = perfect negative (move in opposite directions). 0 = no relationship. Knowing this helps you avoid accidentally doubling your risk or unknowingly hedging positions.
Why do EURUSD and GBPUSD correlate?
Both pairs have USD as the counter currency. When USD strengthens, both EUR and GBP tend to weaken against it. Historical correlation is typically +0.85 to +0.95. Trading both long simultaneously is essentially the same as doubling your USD short position.
How can I use correlation in trading?
1) Avoid risk doubling: don't go long EURUSD and long GBPUSD simultaneously — they're nearly the same trade. 2) Hedging: long EURUSD + long USDCHF partially hedges USD exposure (correlation ≈ −0.93). 3) Confirmation: if EURUSD and GBPUSD both break a level, the signal is stronger.
Does correlation change over time?
Yes. Correlations shift with central bank policy changes, geopolitical events, and market regimes. The values in this calculator are historical averages — always verify with current data from your broker or trading platform, especially around major economic events.
For current, rolling correlation figures, check your broker's platform or a dedicated market-data provider — this tool's dataset is a historical snapshot, not a live feed.
Last updated: 12 July 2026 · Correlation values are historical averages and will drift from current market conditions.