08-20-2009, 09:37 AM
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Moderator
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Join Date: May 2008
Posts: 294
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Quote:
Originally Posted by imported_Bigpips
Hi Xiao,
You can use the CORREL function in Excel to determine whether two data sets are related, and if so, how strongly. The correlation coefficient ranges from +1, indicating a perfect positive linear relationship, to -1, indicating a perfectly negative linear relationship. To calculate a correlation coefficient for a sample, Excel uses the covariance of the samples and the standard deviations of each sample. To use the CORREL function in Excel, just select the two sets of data to use as the arguments and use the following syntax:
=CORREL(data set 1,data set 2)
where data set 1 is the price of the first currency and data set 2 is the price of the other currency, for example the EUR and the USD.
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David Rodriguez does a correlation report on a weekly basis that you might find interesting. It is posted in the cross markets section. US Dollar Remains Correlated to S&P 500, Ignores Interest Rates
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John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.
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