Cross-asset correlations: what's working right now?
Correlations between currencies, bonds, equities and commodities shift over time — what worked last quarter may be broken this one. Mapping the current correlations is a monthly exercise.
What are you seeing?
- the correlations that are holding
- the one that recently broke
- how it changes your trading
Background: currency correlation explained.
Background: Currency correlation: why EUR/USD and GBP/USD often move together
Pairs that share a currency or an economic driver tend to move in step. How correlation works, why it changes and how it can quietly double your risk.
Which currency pairs are positively correlated?
EUR/USD and GBP/USD, and AUD/USD and NZD/USD, often move in the same direction, although correlations change over time.
Why does correlation matter for risk management?
Holding highly correlated positions is similar to holding one bigger position. A single move can hit several stops at once and multiply the loss.
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