; Correlation trading: Opportunities and tactics
Learning Center
Plans & pricing Sign in
Sign Out
Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

Correlation trading: Opportunities and tactics


The AUD/USD and the EUR/USD have been highly correlated for more than a decade, but "See ya later sucka" shows how that correlation broke down as Australia emerged from the global recession early; while the Eurozone debt issues intensified. Correlation data measuring the co-movements of these pairs had a peak of 72% correlated in October 2009, with correlations going lately below 55%. Constructing such an option would involve a bet that the AUD/USD would be below a price point and at the same time the EUR/USD would be above a certain price point by a certain date. This trade is not usually available through a retail platform but illustrates the scope of tools available to trade currency spreads.

More Info
To top