DEFINITION of 'Rescaled Range Analysis'
A statistical analysis of a timeseries of financial data that attempts to find patterns that might repeat in the future. While rescaledrange analysis techniques have proved useful in other mathematical endeavors, the evidence for its use in analyzing financial data remains somewhat unproven. There are two main variables used in this technique – the range of the data (as measured by the highest and lowest values in the time period), and the standard deviation of the data. A derivative of this mathematical result is known as a Hurst exponent; if a trend actually exists in the data, this Hurst exponent can extrapolate a future value or average for the data point.
INVESTOPEDIA EXPLAINS 'Rescaled Range Analysis'
The desire to predict patterns in financial data (especially asset prices) is as old as the history of data itself. What makes the search so appealing is that stock market history does show cyclicality, albeit in a nonperiodic way. Business cycle lengths seem to keep showing up in periods of four to five years, although nobody can explain why.

Business Cycle
The fluctuations in economic activity that an economy experiences ... 
Cyclical Stock
An equity security whose price is affected by ups and downs in ... 
Residual Standard Deviation
A statistical term used to describe the standard deviation of ... 
Standard Deviation
1. A measure of the dispersion of a set of data from its mean. ... 
Polynomial Trending
A type of trend that represents a large set of data with many ... 
Regression
A statistical measure that attempts to determine the strength ...

What assumptions are made when conducting a ttest?
The common assumptions made when doing a ttest include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >> 
What is the utility function and how is it calculated?
In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >> 
What are some of the more common types of regressions investors can use?
The most common types of regression an investor can use are linear regressions and multiple linear regressions. Regressions ... Read Full Answer >> 
What types of assets produce negative portfolio variance?
Assets that have a negative correlation with each other produce negative portfolio variance. Variance is one measure of the ... Read Full Answer >> 
When is it better to use systematic over simple random sampling?
Under simple random sampling, a sample of items is chosen randomly from a population, and each item has an equal probability ... Read Full Answer >> 
What are some common financial sampling methods?
There are two areas in finance where sampling is very important: hypothesis testing and auditing. The type of sampling methods ... Read Full Answer >>

Markets
The Uses And Limits Of Volatility
Check out how the assumptions of theoretical risk models compare to actual market performance. 
Investing
The Ups And Downs Of Investing In Cyclical Stocks
This strategy can be profitable but only if you know when to dump these stocks. 
Active Trading
Market Cycles: The Key To Maximum Returns
You need to understand the various phases of the market cycle to avoid bubbles and make the best investments. 
Economics
What's a Centrally Planned Economy?
A centrally planned economy is one where the government controls the country’s supply and demand of goods and services. 
Economics
What are Barriers to Entry?
A barrier to entry is any obstacle that restricts or impedes a company’s efforts to enter an industry. 
Mutual Funds & ETFs
ETF Analysis: SPDR S&P 500 Trust
Find out more about the SPDR S&P 500 ETF Trust, the characteristics of the exchange traded fund and the suitability of investing in the fund. 
Mutual Funds & ETFs
ETF Analysis: Energy Select Sector SPDR
Find out more about the Energy Select Sector SPDR Fund, the top holdings of this exchangetraded fund and the characteristics of the fund. 
Investing News
The Financial Singularity Will Destroy Your Return
Given the current and future growth of financial technology, many believe algorithms will soon define what drives market outcomes. With a wealth of big data, algorithms would be able to create ... 
Economics
Explaining the Liquidity Coverage Ratio
The liquidity coverage ratio requires banks and other financial institutions to hold enough cash and liquid assets on hand to weather market stress. 
Fundamental Analysis
Calculating Valuation
Valuation is the process of determining what an asset is worth.