In this paper, a multifunction three-phase balance relay based on normalized correlation coefficients is proposed to detect and estimate imbalances and perturbations in synchronous machine output signals. Furthermore, fresh definitions of imbalance and disturbance indicators derived using the correlation estimators are introduced, taking into account the changes in the waveform phase displacement, frequency, amplitude, and shape of the machine three-phase waves. Experimental tests are performed on a motor–generator set connected to a three-phase load, which is used to identify and evaluate the imbalance and disturbance conditions of the voltage and current measurements. Extensive tests for different fault types have been presented. The practical results show that the proposed protection can respond quickly to faults, and assess online the level of the imbalance/disturbance with high accuracy. Its running time is within one cycle. In addition, the proposed algorithm’s reliability and accuracy are its most significant attributes, whose percentages exceed 96.6%. The present algorithm considers the impact of both negative and zero sequence components when measuring di-symmetry factors, while some conventional approaches merely rely on the negative sequence component computed for the machine voltages and currents.