## Pearson Correlation Coefficient Formula: A Guide for Traders

The Pearson Correlation Coefficient is an important formula used in the forex market to measure the degree of correlation between two currency pairs. This formula takes the prices of two currency pairs and determines the extent of movement between the two currencies. It helps traders to determine which currency pairs are associated with each other and potentially provide trading strategies. The Pearson Correlation Coefficient uses a value range between -1 and +1 to indicate a strong correlation, while a value of 0 indicates no correlation. A negative correlation (values from -1 to 0) means that the currency pairs move in opposite directions and a positive correlation (values from 0 to 1) means that the currency pairs move in the same direction.