Glossary · Risk & money management
Correlation
A measure from −1 to +1 of how closely two pairs move together. Highly correlated positions can double your risk without you noticing.
With real data
Real correlations of daily returns (last 12 months)
- EUR/USD vs GBP/USD
- +0.84
- EUR/USD vs USD/CHF
- -0.83
- AUD/USD vs NZD/USD
- +0.83
- USD/JPY vs EUR/USD
- -0.55
Calculated from price data up to 6 October 2026.
In practice
EUR/USD and GBP/USD have often had a correlation above +0.8. Buying both with 1% risk each is closer to one 2% bet against the dollar than two separate trades.
Counting open trades instead of exposure. Five positions can all depend on the same currency move.
Currency correlation explained
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