Indicator for Comparing Which of Two Correlated Instruments is Leading/Lagging?

Discussion in 'Technical Analysis' started by BOC, Jan 19, 2020.

  1. BOC

    BOC

    One can overlay two charts for this and course they will switch back and forth, but is there an indicator which would show this? Suggestions appreciated.
     
    murray t turtle and David Taylor like this.
  2. Bugenhagen

    Bugenhagen

    Which platform?
     
  3. BOC

    BOC

    Sierra Charts. Has all the standard indicators and other goodies. Thanks.
     
  4. tommcginnis

    tommcginnis

    Leading and lagging, versus co-related, are two very different things.

    https://tylervigen.com/spurious-correlations

    Posit a theoretical connection, first, and then seek to disprove it. It won't *guarantee* that you're posited connection is sound, but it'll sure cut down on noise.

    FWIW, there is no *direct* "T/A" tool for testing such a hypothesis, but one this you might do is create a single inter-market ("spread") product, and see how it trades over time. Do that logarithmically, and you'll have percent changes that don't depend so much on units.
     
    David Taylor likes this.
  5. I do this last one on Koyfin - it’s pretty neat.
     
  6. panzerman

    panzerman

    Correlation is the wrong metric to be looking at in the first place. Cointegration is the proper metric. Now down that rabbit hole you go.
     
    beginner66 likes this.
  7. 2rosy

    2rosy

    granger causality
     
  8. %%
    Yes;
    more than one way to do that.Gain year to date is one of the better ways..................................................................................................................
     
  9. Posts like these make me feel fortunate to have found the ET community.
     
    #10     Jan 20, 2020