Intermarket analysis

Intermarket analysis,

Definition of Intermarket analysis:

  1. Intermarket analysis looks at more than one related asset class or financial market to determine the strength, or weakness, of the financial markets, or asset classes, being considered.

  2. Intermarket analysis is a method of analyzing markets by examining the correlations between different asset classes. In other words, what happens in one market could, and probably does, affect other markets, so a study of the relationship(s) could prove to be beneficial to the trader.

  3. A type of analysis whereby the movement in price in one particular market can be evaluated based on evaluating another market. The two markets generally need to be similar in nature or have been proven to move in correlation with each other.

How to use Intermarket analysis in a sentence?

  1. A simple correlation study is the easiest type of intermarket analysis to perform, where results range from -1.0 (perfect negative correlation) to +1.0 (perfect positive correlation).
  2. The most widely accepted correlation is the inverse correlation between stock prices and interest rates, which postulates that as interest rates go up, stock prices go lower, and conversely, as interest rates go down, stock prices go up.
  3. Intermarket analysis is a method of analyzing markets by examining the correlations between different asset classes.

Meaning of Intermarket analysis & Intermarket analysis Definition