Published by Zeb BhamUnderstanding correlations between different currency pairs can make the difference between profit and loss, FX360 reports.Writing for the forex trading forum, Kathy Lien, director of currency research at GFT, explained that analysing correlation percentages allows investors to determine the likelihood of two different currency pairs moving in tandem or tracking different paths."For example, over the past month if you were long the EUR/USD and short USD/CHF, you basically had 2 opposing trades that moved against each other nearly 100 percent of the time, resulting in little profits," she explained.Ms Lien concluded that while it is vital that traders familiarise themselves with such correlations as part of their forex risk management strategy, it is also important to remember that they will change over time and should therefore be checked regularly.In its long-term bets for this week, FX360 has recommended buying GBP/USD currency pairs, while NZD/USD and AUD/CAD should be dropped to keep medium-term profits on track.For more information on foreign exchange treasury services and risk management, visit our Corporate FX site