Currency correlation in forex is a positive or negative relationship between two separate currency pairs.
A positive correlation means that two currency pairs move in tandem, and a negative correlation means that they move in opposite directions.
The strength of a currency correlation depends on the time of day, and the current trading volumes in the markets for both currency pairs.
The Pearson correlation coefficient (PCC) is the most used measure of currency correlations in the financial market.
Many traders will use a spreadsheet to calculate the Pearson correlation coefficient,
because the method for doing so manually is very complex.
This fantastic indicator makes everything as you need:
1., calculates the Pearson correlation coefficient (PCC)
2., draws the 2 price graphs on one chart
How to use it?
1., Open a new chart with the first/main Symbol and Time Frame
2., Attach this indicator to the chart
3., Set the input parameters as Symbol2 and the Number of candles to calculate the PCC
4., Enjoy the results
Currency Pairs That Typically Move in the SAME Direction:
EURUSD – GBPUSD, EURUSD – AUDUSD, EURUSD – NZDUSD, USDCHF – USDJPY, AUDUSD – NZDUSD
Currency Pairs That Typically Move in the OPPOSITE Direction:
EURUSD – USDCHF, GBPUSD – USDJPY, USDCAD – AUDUSD, USDJPY – AUDUSD, GBPUSD – USDCHF
Try it for free or purchase the Full version.
Free version is working on Daily TimeFrame only.