With currency correlations fluctuating with the period of time you select, it is best to possess an area copy of the correlation results for simple use. Lets discuss how it is done with excel. Simply follow the steps below:
1. Use you trading platform of forex charting software to export the currency pairs you propose to review. Choose “csv” format.
2. Now use the Import functionality in excel (you reach it by going to Data>Import External Data>Import Data) to get all data into Excel.
3. make sure the data within the imported statistic agree for every row.
4. Delete the columns for Open, High and Low. Change the names of the columns with the closing prices to the names of the currency pairs to which they belong.
5. Use the CORREL function to calculate the correlation. This function works on two arrays, which can be same-length ranges of closing prices for the 2 pairs. Simply type into one among the empty cells “=correl(” then press the “fx” button next to the formula bar and choose the 2 ranges. The resultant formula will appear as if this =CORREL(A1:A40;B1:B40) and may calculate the price of the coefficient of correlation between the pairs for the chosen period of your time . In this example it’ll be 40 hours, days or weeks counting on the duration of the charts being analyzed.
To calculate the matrix of any number of pairs repeat the above steps 1 to three for every pair. Crop the entire table in order that the names of the currency pairs are within the first row and therefore the closing prices are just for the period of time that you simply wish to analyze. Instead of using the CORREL function go to Tools>Data Analysis… and select “Correlation” from the list of analysis tools. Press the button next to the “Input Range” then highlight the contents of all the columns. Check the mark next to “Labels in First Row”. Select the output range by picking a cell to the proper of the table. Press “OK”.