How much extra risk am I taking by holding two correlated currency pairs at the same time?
Enter Your Two Positions
Check a correlation matrix on your platform for an approximate coefficient. Correlations between pairs shift over time and are not fixed.
Your Result
Fill in the fields on the left and click Calculate to see your combined correlated risk.
How this is calculated
The tool combines your two risk amounts using a standard two-asset risk formula: the square root of (Risk A squared, plus Risk B squared, plus 2 times the correlation times Risk A times Risk B).
When your two trades are positioned in opposite directions, the correlation is flipped in the formula, since a positively correlated pair traded in opposite directions behaves like a natural partial hedge rather than a double-up.
The "simple sum" shown for comparison is just Risk A plus Risk B, the amount you would be exposed to if the two pairs moved together in the worst possible way.
Correlation coefficients between currency pairs are not fixed. They shift with interest rate policy, risk sentiment, and time, so treat any figure you enter as an approximation, not a guarantee.
This tool combines exactly two positions. A full portfolio with three or more correlated pairs needs a broader risk model than this simplified pairwise version.
Risk & liability disclaimer: This calculator performs a simplified two-asset risk combination using the correlation coefficient and risk amounts you enter. It does not pull live correlation data from any broker or data provider, and historical correlation is not a guarantee of future correlation. It is not financial advice. Forex trading involves substantial risk of loss and is not suitable for everyone. Trading Habits is not a broker-dealer, registered investment adviser, or tax professional, and is not affiliated with any broker, exchange, or data provider. Always verify results independently before making a trading decision.
Two Trades Are Not Always Two Independent Risks
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Correlated forex positions can add up to far more risk than the sum of two unrelated trades.