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Currency Correlation And Application

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Currency Correlation And
Application
By Izet Musaj
Currency Correlation And Application
Don't Quit! Suffer Now
and Live Your Life As A
Champion

 Everything in the foreign exchange market is somehow linked.

 Understanding the relevance of money to a trader can help to develop effective trading
strategies, and can be a great tool for trading.
 Correlation is calculated by the price data, through these figures can determine the
correlation between different currency pairs.
 If you want to double the current position, the use of correlation analysis can provide
you with a lot of help.
 This method can maximize the benefits, and can measure the risk and improve the
efficiency of the transaction.
Currency Correlation And Application
Don't Quit! Suffer Now
and Live Your Life As A
Champion

 To understand the correlation of money in investment portfolio is a good way to

measure the degree of risk exposure.
 You might think that by investing in different currencies, you can spread the risk, but
many of the money is often the same or the opposite.
 The correlation between money and money is likely to be strong, or weak, and can last
for weeks, months, or even years.
 Any correlation coefficient is in the form of decimal.
Currency Correlation And Application
Don't Quit! Suffer Now
and Live Your Life As A
Champion
Correlation data sheet (2015 data)
EURUSD AUDUSD USDJPY GBPUSD NZDUSD USDCHF USDCAD
1M 0.63 -0.7 0.36 0.47 -0.94 -0.15
3M 0.43 -0.61 0.46 0.31 -0.86 -0.2
6M 0.51 -0.36 0.55 0.5 -0.85 -0.33
12M 0.52 -0.26 0.6 0.47 -0.83 -0.38
AUDUSD EURUSD USDJPY GBPUSD NZDUSD USDCHF USDCAD
1M 0.63 -0.3 0.08 0.82 -0.46 -0.26
3M 0.43 0.13 0.24 0.85 -0.07 -0.52
6M 0.51 0.35 0.41 0.86 -0.15 -0.6
12M 0.52 0.41 0.45 0.86 -0.16 -0.6
USDJPY EURUSD AUDUSD GBPUSD NZDUSD USDCHF USDCAD
1M -0.7 -0.3 -0.1 -0.02 0.83 -0.16
3M -0.61 0.13 -0.07 0.22 0.86 -0.3
6M -0.36 0.35 0.01 0.36 0.68 -0.39
12M -0.26 0.41 0.04 0.44 0.61 -0.36
GBPUSD EURUSD AUDUSD USDJPY NZDUSD USDCHF USDCAD
1M 0.36 0.08 -0.1 0.2 -0.31 -0.24
3M 0.46 0.24 -0.07 0.25 -0.3 -0.36
6M 0.55 0.41 0.01 0.37 -0.34 -0.42
12M 0.6 0.45 0.04 0.41 -0.38 -0.44
NZDUSD EURUSD AUDUSD USDJPY GBPUSD USDCHF USDCAD
1M 0.47 0.82 -0.02 0.2 -0.29 -0.44
3M 0.31 0.85 0.22 0.25 0.04 -0.44
6M 0.5 0.86 0.36 0.37 -0.13 -0.52
12M 0.47 0.86 0.44 0.41 -0.1 -0.55
USDCHF EURUSD AUDUSD USDJPY GBPUSD NZDUSD USDCAD
1M -0.94 -0.46 0.83 -0.31 -0.29 0.02
3M -0.86 -0.07 0.86 -0.3 0.04 -0.09
6M -0.85 -0.15 0.68 -0.34 -0.13 0.04
12M -0.83 -0.16 0.61 -0.38 -0.1 0.09
USDCAD EURUSD AUDUSD USDJPY GBPUSD NZDUSD USDCHF
1M -0.15 -0.26 -0.16 -0.24 -0.44 0.02
3M -0.2 -0.52 -0.3 -0.36 -0.44 -0.09
6M -0.33 -0.6 -0.39 -0.42 -0.52 0.04
12M -0.38 -0.6 -0.36 -0.44 -0.55 0.09
Currency Correlation And Application
Don't Quit! Suffer Now
and Live Your Life As A
Champion

• The greater the number, the stronger the correlation of the currency pair.
• For example: while investing in USDJPY and USDCHF means doubling the
size of the same position. The same token, to do more than one pair of
money on the same time shorting another currency pair, but also very unwise
choice.
• Negative correlation is the same.
Currency Correlation And Application
Don't Quit! Suffer Now
and Live Your Life As A
Champion

• How to calculate the correlation between money and money

• In the first column of EXCEL marked GBPUSD, and enter the weekly closing
price of GBPUSD, in the second column labeled USDCHF, and the data
USDCHF weekly closing price
• In the two column at the bottom of a blank cell input function “= CORREL
()”, the mouse click on the bracket, with the mouse to select the first column
of data, enter a comma, and then select the second column data, click the
Enter key
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