DXY Correlation Regimes

DXY Correlation Regimes measures how coupled the chart symbol currently is to the U.S. Dollar Index and only lets the relationship count once it has proven persistent. A 50-bar rolling correlation of returns is classified by sign and magnitude — strong or moderate, positive or inverse, or decoupled — and a classification must survive 5 consecutive bars before it becomes the active regime. The pane treats DXY correlation regimes as a filter, not a signal: the Long Bias row crosses the active regime with the dollar's own trend to print Tailwind, Headwind or No edge.

How to Trade the DXY Correlation Regimes?

• Strong regime + dollar trend: in an inverse regime a rising dollar is a headwind for fresh longs; in a positive regime, a tailwind.
• Decoupled band: readings inside the weak thresholds carry no usable regime — the shaded dead zone.
• Sign flips: the correlation crossing zero is the first warning a regime is dissolving; the dashboard counts flips inside the window.

Alerts cover regime confirmations, decoupling, sign flips and strong-correlation weakening.

DXY Correlation Regimes Settings

• Dollar Index (default TVC:DXY): the index the chart symbol is measured against.
• Correlation Window (default 50): shorter windows react faster but flip more often.
• Source (default close) and Return Type (default Simple): the series and return convention used.
• Strong Threshold (default 0.7) / Weak Threshold (default 0.3): magnitude boundaries for strong and decoupled classifications.
• Confirmation Bars (default 5): bars a classification must persist before the regime activates.
• Dollar Trend Length (default 20): EMA length judging whether the dollar is rising or falling.
• Show Dashboard (default enabled); Gradient Fill, Regime Background and Shade Decoupled Band default on.

Frequently Asked Questions

How is this different from a plain correlation plot?

The raw statistic is only the starting point — the Correlation Coefficient plots it directly. This build adds classification thresholds, a persistence gate, a sign-stability count and the dollar-trend crossing that makes it directional.

Why compute correlation on returns rather than prices?

Two series that merely trend together show inflated price-level correlation even when their bar-to-bar moves are unrelated. Returns strip the shared drift, so the reading reflects genuine co-movement.

Can the Dollar Index input point at something else?

Yes — it accepts any ticker, so the same engine can measure a regime against a sector index or a related market. Rolling correlations lag by construction, so re-verify the read after macro shifts.