JoymistaWhat Is Correlation Between Currency Pairs?
Correlation is a measure from −1 to +1 of how two markets move together: +1 always the same way, −1 always opposite, and 0 no clear link.
Explained
Knowing correlation keeps you from doubling your risk without noticing: buying two strongly correlated pairs is like one trade at double the size. Correlation changes over time and timeframe, so check it regularly.
Example
Example with made-up numbersTwo pairs with a +0.85 correlation; buying each at 1% risk puts your real risk closer to 2% on the same idea.
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Open in JoymistaEducational content, not investment advice.