Correlation, allocation in a portfolio. Calculation methods - page 6
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I don't know what you're counting, but it doesn't seem right.
It would be good to have minimal interaction of non-major countries with each other and different economies.
so how much did science say? what exactly is the result not satisfactory to you?
If that was a question for me, I did not understand it)
This would be with minimal interaction of non-major countries with each other and different economies.
Well, not just forex is interesting. but in general
In general, valuation and existence are different things (it has already been mentioned above).) 2 firms in different countries may develop in the same way and the shares will be correlated, but in fact their impact on each other, or dependence on the same factors will be nil. In general, a real situation analysis is always needed to assess the correlation in my non-professional opinion)
In general, valuation and existence are different things (above already mentioned).) 2 firms in different countries may develop in the same way and the shares will be correlated, but in fact their impact on each other, or dependence on the same factors will be zero. In general, a real situation analysis is always needed to assess the correlation in my non-professional opinion)
The results will be true-negative. I cannot understand the logic. You can also get false positive results. When there is no correlation in TA but in fact there is. Only if you calculate a large sample of instruments and group them. But so far only three instruments. Analysis is possible.
Well, we are looking for the same signals at the same moment on different correlations, because of the different correlation you can take more assets to deversify/increase the profit.
A typical example of how human intuition does not work well in theoretical problems. The probability of coincidence is very high (the paradox of birthdays)
The point is not that it is large, but that for each individual algorithm it will only be the numbers that are peculiar to it. This means that applying any formula to a series of random numbers can only cloud the skull, no more.
And in general, it is difficult to imagine any random series.
In simple words - there is an algorithm of RNG, there is a logical sequence of operations for generating random numbers, which in fact will not be random and will necessarily obtain a logical distribution of generation.
For example, generate numbers from 1 to 10. For the RNG algorithm number 1 will fall out more often 5-rings, and for the algorithm number 2, 10-rings. And the repeatability of this distribution will be 100%.
And before you blurt out the theorem, I suggest you check in practice, performing a million generations on each algorithm and make sure of what has been said.
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Exactly the same in the market.
There is a correlation of one pair with another, and such that it never collapses!
I have told about it many times before and posted screenshots that have not been deleted.
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the attempt to detect this pattern through the correlation coefficient and even more so to try to autocorrelate it will end in failure, 100%.
because the coefficient is floating, now close to 1, now close to -1
individual pairs are free in their movement, but they are related ;)
If so, this is roughly how a cross and a major move, but not always.
Physically, the process looks like this (I have already written about it many times)
- if a major is trending, the cross is flat
- If the cross is trending, the major is flat.
Correspondingly, in these cases the correlation will be close to zero.