Financial Asset Correlation Heatmap
Correlation measures the statistical relationship between two financial assets, on a scale from -1 (perfectly inverted movements) to +1 (perfectly synchronized movements). This tool calculates the Pearson coefficient between major Forex pairs, cryptocurrencies and commodities to help you diversify your portfolio and manage your risk.
Calculating correlations...
How to use correlations in trading?
Positive correlation (+0.7 to +1.0)
Two assets with strong positive correlation move in the same direction. For example, EUR/USD and GBP/USD are historically highly correlated. Warning: opening positions in the same direction on correlated assets multiplies your real risk without diversifying.
Negative correlation (-0.7 to -1.0)
Two assets with strong negative correlation move in opposite directions. EUR/USD and USD/CHF are the classic example. Useful for hedging: a long position on one can offset a loss on the other.
Weak correlation (-0.3 to +0.3)
Weakly correlated assets offer true diversification. Combining Forex positions with cryptocurrencies can reduce the overall risk of your portfolio since their movements are largely independent.
Correlations change over time
Correlations are not fixed. They vary with market conditions, economic crises and monetary policies. That's why our tool offers different periods: a 1-week correlation can differ significantly from a 1-year one.
Methodology
Correlations are calculated using the Pearson coefficient on daily returns of assets. Price data comes from Alpha Vantage and is updated daily. The Pearson coefficient measures the linear relationship between two variables: a value close to +1 indicates a strong positive relationship, -1 a strong negative one, and 0 the absence of a linear relationship.