Motivated by molecular data on female premutation carriers of the fragile X mental retardation 1 (FMR1) gene, we present a new method of covariate adjusted correlation analysis to examine the association of messenger RNA (mRNA) and number of CGG repeat expansion in the FMR1 gene. The association between the molecular variables in female carriers needs to adjust for activation ratio (ActRatio), a measure which accounts for the protective effects of one normal X chromosome in females carriers. However, there are inherent uncertainties in the exact effects of ActRatio on the molecular measures of interest. To account for these uncertainties, we develop a flexible adjustment that accommodates both additive and multiplicative effects of ActRatio nonparametrically. The proposed adjusted correlation uses local conditional correlations, which are local method of moments estimators, to estimate the Pearson correlation between two variables adjusted for a third observable covariate. The local method of moments estimators are averaged to arrive at the final covariate adjusted correlation estimator, which is shown to be consistent. We also develop a test to check the nonparametric joint additive and multiplicative adjustment form. Simulation studies illustrate the efficacy of the proposed method. (Application to FMR1 premutation data on 165 female carriers indicates that the association between mRNA and CGG repeat after adjusting for ActRatio is stronger.) Finally, the results provide independent support for a specific jointly additive and multiplicative adjustment form for ActRatio previously proposed in the literature.