Forex Currency Pair Correlation

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Forex Currency Pair Correlation

Two currencies can be said to have a positive correlation if they both go up at the same time. For example, let's say that your favorite currency is USD and you're betting on EURUSD with 120/120 while another person bets against you by placing 100 Euros in the opposite direction of yours ($200). If Euro goes down 10% (to about $1.08) then there would only be one winner: The person who betted €100 euros at an exchange rate of 1€=$.91($0-10%), which means he won about 11 dollars!

The term "currency correlations" refers to how two different coins are related or connected through their fluctuating values over time based off factors such as inflation rates, economic growth

Which Forex Pairs Are Most Correlated?

Why are currency pair correlations so important? It's because they show the economic ties between two countries. For example, GBP/USD and EUR/USD have a close relationship since one is related to the other.

Forex traders around the world are always searching for new opportunities and currency pairs that may offer tremendous profit potential. One of these sought-after pairings is between USD/EUR, which has a 95% correlation when examined over 1 month periods as shown in the forex table.

The Forex Currency Pair Correlation Table shows correlations among currencies that have been calculated on one monthly basis based on their geographic proximity or distance from each other, and rank as two globally held reserve currencies.

How Do You Trade Correlated Forex pairs?

As the world becomes more connected, currency prices are increasingly interlinked and responsive to global changes. If one is up, it's likely that another will be down as well - so buying or selling a symbol in anticipation of this movement can lead to significant profits when done correctly! 

To trade on correlations between currencies, find two different symbols with similar movements by looking at their historical data against each other: if they have had positive relationships throughout history (i.e., an increase in value for both), invest your money into them simultaneously; however if there has been negative correlation over time (wherein price fluctuates accordingly) then go ahead and place opposing positions side-by-side!

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