Currency correlation refers to the relationship between two currency pairs and how their prices move in relation to each other. Key points include: 1. **Positive Correlation**: Pairs move in the same direction (e.g., EUR/USD and GBP/USD). 2. **Negative Correlation**: Pairs move in opposite directions (e.g., USD/CHF and EUR/USD). 3. **Strength of Correlation**: Ranges from -1 to +1; +1 means perfect positive correlation, -1 means perfect negative correlation, and values near 0 indicate little correlation. 4. **Risk Management**: Understanding correlations helps avoid overexposure to related pairs, aiding in effective risk management. 5. **Market Analysis**: Analyzing correlations can help anticipate market movements and inform trading strategies. Incorporating currency correlation analysis can enhance decision-making and improve risk management for traders.