- FAQ - ITR Economics
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How do you define correlation for the indicators and what is the math behind it?
It is measured by the percentage of time the data set and the indicator are moving in the same direction together.
Definition: Correlation represents the relationship between your data and the indicator. It is measured by the percentage of time the data set and the indicator are moving in the same direction together.
Math behind it: The calculated figure is the highest correlation possible considering a range of how many months the indicator could lead or lag the data set.