Understanding the relationships between pairs (Correlation) helps reduce risk or exploit similar movements.
📌 First: In Forex
Some pairs often move together (positive correlation), while others move against each other (negative correlation):
✅ Pairs that often move together:
• EUR/USD ↔ GBP/USD → Significant similarity, as both are against the dollar.
• AUD/USD ↔ NZD/USD → Both are linked to commodities (gold, milk, iron).
• USD/CHF ↔ USD/JPY → Move in a converging direction as both are safe-haven currencies (franc and yen).
🔄 Pairs that often move against each other:
• EUR/USD ↔ USD/CHF → If Euro/Dollar rises, usually Dollar/Franc falls.
• GBP/USD ↔ USD/JPY → Often an inverse relationship due to dollar strength/weakness.
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📌 Second: In crypto
Correlation is greater than in Forex, as the whole market is linked to Bitcoin:
✅ Moves with Bitcoin (BTC):
• Ethereum (ETH) → Most correlated with Bitcoin.
• BNB, SOL, ADA, and XRP → Usually move in the same direction with varying strength.
🔄 Assets that sometimes move against Bitcoin:
• Stablecoins (USDT, USDC, DAI) → When the market crashes, money flows into them, causing their value to rise (stability), while other currencies fall.
• Some small projects (Altcoins) may temporarily oppose the trend due to news specific to them.
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📊 Conclusion
• In Forex: pairs in the same currency often move together.
• In crypto: Most of the market follows Bitcoin, with varying strength and timing.
1. Forex (FX)
Pairs that often move together (strong positive correlation)
EUR/USD and GBP/USD – Very strong positive correlation, around +0.95.
AUD/USD and NZD/USD – Strong positive correlation, around +0.87 to +0.95.
EUR/JPY and GBP/JPY – Strong positive correlation, around +0.90.
USD/CHF and GBP/CHF – Strong positive correlation of about +0.90.
Pairs that move against each other (strong negative correlation)
EUR/USD and USD/CHF – Very strong negative correlation, around −0.95.
GBP/USD and USD/CHF – Also a strong negative correlation, around −0.93.
USD/CAD and AUD/USD – Strong negative correlation, around −0.85.
2. Digital currencies (Crypto)
Ethereum (ETH) and Bitcoin (BTC) – Moderate to strong positive correlation, often around +0.70.
Overall, major altcoins tend to move with Bitcoin, and correlations usually range from +0.50 to +0.90.
According to BitInfoCharts, there are strong correlations between some currencies such as:
BTC and XRP = 0.96
ETH and XRP = 0.918
XRP and LTC = 0.923.
However, there are indications that the correlation between Bitcoin and altcoins has been declining recently, which may indicate the beginning of some currencies separating from Bitcoin's movement.
📊 Summary of correlations (Forex and Crypto)
Forex
EUR/USD ↔ GBP/USD → Strong positive correlation
AUD/USD ↔ NZD/USD → Strong positive correlation
EUR/USD ↔ USD/CHF → Strong negative correlation
GBP/USD ↔ USD/CHF → Strong negative correlation
USD/CAD ↔ AUD/USD → Strong negative correlation
Crypto
ETH ↔ BTC → Moderate positive correlation (≈ +0.70)
XRP ↔ BTC → Strong correlation (≈ 0.96)
XRP ↔ ETH → Strong correlation (≈ 0.918)
Most altcoins ↔ BTC → Positive correlation (0.50 – 0.90)
Some altcoins recently → Started to separate from BTC's movement (weak or variable correlation)
