Proteins with a modular architecture of multiple domains connected by linkers often exhibit diversity in the relative positions of domains, while the domain tertiary structure remains unchanged. The biological function of these modular proteins, or the regulation of their activity, depends on the variation in domain orientation and separation. Accordingly, careful characterization of interdomain motion and correlated fluctuations of multidomain systems is relevant for understanding the functional behavior of modular proteins. Molecular dynamics (MD) simulations provides a powerful approach to study these motions in atomic detail. Nevertheless, the common procedure for analyzing fluctuations from MD simulations after rigid-body alignment fails for multidomain proteins; it greatly overestimates correlated positional fluctuations in the presence of relative domain motion. We show here that expressing the atomic motions of a multidomain protein as a combination of displacement within the domain reference frame and motion of the relative domains correctly separates the internal motions to allow a useful description of correlated fluctuations. We illustrate the methodology of separating the domain fluctuations and local fluctuations by application to the tandem SH2 domains of human Syk protein kinase and by characterizing an effect of phosphorylation on the dynamics. Correlated motions are assessed from a distance covariance rather than the more common vector-coordinate covariance. The approach makes it possible to calculate the proper correlations in fluctuations internal to a domain as well as between domains.