correlation-analysis

Cointegration testing validates whether assets share a long-run equilibrium, whereas correlation only measures co-movement. Cointegration is necessary to ensure spread stability for mean-reverting pairs trading signals.

You can calculate dynamic hedge ratios using Kalman filter tooling. This estimates half-life and adjusts ratios across regimes, providing rolling metrics that satisfy rigorous cross-market linkage and quant research requirements.

The best way to generate mean-reverting signals is screening cointegrated candidates, validating spread stability, and producing shepherded z-score trading signals with guardrails. This workflow ensures statistical rigor before committing to pairs strategies.

Yes, regime-aware realized correlation works for cross-market linkage scenarios. It evaluates how relationships behave across regimes, incorporating FX-adjusted metrics and lead-lag effects to support portfolio construction and hedge selection.

You should not rely solely on correlation scans when assets lack long-run equilibrium. Without passing cointegration tests and validating spread stability, high correlation alone may fail to produce reliable mean-reverting pairs trading opportunities.