Ep. 1027: Performance Data with Michael Covel on Trend Following Radio
Michael Covel's Trend Following
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The Importance of Correlation in Trading Trend Followers
Correlation is a statistical term giving the strength of linear relationship between two random variables. It is the historical tendency of one to move in tandom with another. The further away from plus one one gets, and thus closer to negative one, the better a diversifier. Comparing correlations gave the evidence that d followers trade, typically, the same markets, at the same time.
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