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PCA: Using Mean-Reverting Residuals as Trading Signals

Download PDF Introduction PCA (principal component analysis) allows you to explain a system’s total variance through a number of orthogonal components, thus, independent between each other. The main PCs account for most of the variance of the system and represent the main factors that influence variability. In a trading environment, Read more…

By BSIC, 3 days9 November 2025 ago

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