Pearson correlation - page 7

[Sergey Golubev]

Correlation

The beginning

1. Correlation indicators: very good thread with some systems, explanations and good usefull indicators.
2. Chart Transposition Indicator: original thread.
3. FINEXX Correlation System and EA - the thread 
4. Currency corelation - the thread.
5. trend corelation - discussion thread.
6. Correlation Index - small thread with indicator
7. complimentary pairs thread 
8. Cross-Currency Strength: good thread with indicators.
9. Pearson correlation thread 
10.  Correlations revisited ... - the thread with interpretations and detailed explanation of 3 prevailing correlations methods with all the particularities and images: Pearson (linear) correlation, Kendall's tau and Spearman's rank correlation
11. Cluster Indicators thread.
12. Correlation candles indicator (MT5) - the post. Two possible types of correlation used: Pearson correlation and Spearman correlation
13. Rank correlations (Pearson and Spearman) indicator (MT5) - the post with original version, the post with fixed version. This indicator is using Pearson correlation and Spearman correlation, besides, it has an option to use some of the 22 price types as well as using floating levels

After

1. Correlation system thread
2. Currency Correlations, Part I - the video
3. Currency Correlations, Part II - the video 
4. MFCS Currency Correlation Chart - MT5 CodeBase indicator
5. MT5 CodeBase on HowTo - post with the articles
6. Multi currency EA ideas - the thread
7. Forex Correlation Theory thread

[Sergey Golubev]

Statistical Arbitrage with predictions

Statistical arbitrage is a sophisticated financial strategy that leverages mathematical models to capitalize on price inefficiencies between related financial instruments. Typically applied to stocks, bonds, or derivatives, this approach requires a deep understanding of correlation, cointegration, and the Pearson coefficient, essential tools for identifying and exploiting market opportunities.

Pearson Coefficient is a statistical measure that calculates the strength and direction of the linear relationship between two variables. Values of the Pearson coefficient range from -1 to 1, where 1 signifies a perfect positive linear relationship, -1 a perfect negative linear relationship, and 0 no linear relationship. In statistical arbitrage, a high absolute value of the Pearson coefficient between two assets might suggest a potential trading opportunity, assuming they will revert to a long-term average relationship.

[Sergey Golubev]

Forum on trading, automated trading systems and testing trading strategies

How to Start with Metatrader 5

Sergey Golubev, 2019.03.06 17:27

Good article was published - 

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Practical application of correlations in trading 

Correlation is a statistical relationship between two or more random variables (or quantities which can be considered random with some acceptable degree of accuracy). Changes in one ore more variables lead to systematic changes of other related variables. The mathematical measure of the correlation of two random variables is the correlation coefficient. If a change in one random variable does not lead to a regular change in the other random variable but leads to a change in another statistical characteristic of this random variable, such a relation is not considered correlation, although it is statistical.

Table of contents

• Introduction
• The concept of correlation
• Types of correlations
• Implementation of indicators
• Correlation-based trading system
• Testing the trading system
• Findings
• Conclusions

[Sergey Golubev]

Developing Trading Strategy: Pseudo Pearson Correlation Approach

This article introduces a new indicator built from three oscillators using a modified version of the Pearson correlation function, which we call the Pseudo Pearson Correlation (PPC). The PPC indicator aims to quantify the dynamic relationship between oscillators and apply it within a practical trading strategy.