Cross-Correlation

DEFINITION of 'Cross-Correlation'

A statistical measure timing the movements and proximity of alignment between two different information sets of a series of information.

BREAKING DOWN 'Cross-Correlation'

Cross correlation is generally used when measuring information between two different time series. The range of the data is -1 to 1 such that the closer the cross-correlation value is to 1, the more closely the information sets are.

RELATED TERMS
  1. Autocorrelation

    A mathematical representation of the degree of similarity between ...
  2. Material Insider Information

    Material information, about certain aspects of a company, that ...
  3. Customer Information File (CIF)

    A computerized file that stores all pertinent information about ...
  4. Accounting Information System - ...

    The collection, storage and processing of financial and accounting ...
  5. Information Coefficient - IC

    A correlation value that measures the relationship between a ...
  6. Tipping

    The act of providing material non-public information about a ...
Related Articles
  1. Managing Wealth

    R-Squared

    Learn more about this statistical measurement used to represent movement between a security and its benchmark.
  2. Trading

    Understanding Statistics

    Statistics provide the means to analyze data and then summarize it into a numerical form.
  3. Trading

    Explaining Autocorrelation

    Autocorrelation is the measure of an internal correlation with a given time series.
  4. Managing Wealth

    Asset Manager Ethics: Rules Governing Capital Markets

    The integrity of the capital markets needs to be kept at utmost importance for all investors. This article shows how to maintain the integrity while investing.
  5. Professionals

    The Difference Between Series 63, 65 and 66

    After passing the first core examination, usually the FINRA Series 6 or Series 7, one hurdle remains. That’s the Series 63, 65 or 66.
  6. Trading

    Correlation

    In the world of finance, correlation is a statistical measure of how two securities move in relation to each other.
  7. Investing

    What Is The Impact Of Research On Stock Prices?

    The answer to this question is directly related to the importance of information in the marketplace.
  8. Markets

    Understanding the Oil & Gas Price Correlation

    Learn how the correlation between the commodity prices for natural gas and oil changed from 2004 to 2015 due to increased natural gas production.
  9. Investing

    Pairs Trading: Correlation

    Correlation is a term from linear regression analysis that describes the strength of the relationship between a dependent variable and an independent variable. Central to pairs trading is the ...
  10. Markets

    Series 24 Exam Prep: Stock Exchanges

    Before you take the series 24, you need to understand exchanges, listing requirements and much more.
RELATED FAQS
  1. Do any markets not exhibit asymmetric information?

    Find out why every market possesses information asymmetry, and why this isn't necessarily a huge or insurmountable problem ... Read Answer >>
  2. What does a high information ratio tell an investor about a mutual fund?

    Learn what the information ratio is used to measure. Understand what a high information ratio tells an investor about a mutual ... Read Answer >>
  3. If I have passed the Series 7 exam, do I need to write the 6 and 63 exams as well?

    Not always. According to the Financial Industry Regulatory Authority (FINRA), (formerly National Association of Securities ... Read Answer >>
  4. I completed the Series 6, do I have to complete the entire Series 7?

    After having written the Series 6 examination, there would be significant overlap with the Series 7 in areas such as mutual ... Read Answer >>
  5. What are the advantages and disadvantages of zero-based budgeting in accounting?

    Learn how the information ratio is calculated as a risk-adjusted measure of performance, and understand how it seeks to differentiate ... Read Answer >>
  6. What does a low information ratio tell an investor about a mutual fund?

    Understand what the information ratio is used to measure. Learn how an investor uses the information ratio to make investment ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center