Start Validating a model

Validating a model

The rapid de-correlation of copper with gold sets an alarm in my world.

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Just like when using a normal It is used to keep track of how many form instances are being displayed.

If you are adding new forms via Java Script, you should increment the count fields in this form as well.

The goodness-of-fit, or “R-squared,” is a respectable 0.78 – the closer to 1.0 the better. 10-year Treasury yield model based on Comex copper & gold prices Interestingly, the correlation holds up for longer periods.

The correlation of the 10-year yield over this two-year period is a very tight -0.88. Extending the model to a three-year period results in a correlation of -0.84 and a slightly greater model error of 17.6 bps and lower R-squared of 0.70.

I chose the gold-to-copper ratio (GCR) for this analysis since we think in "pounds-of-copper-per-ounce-of-gold" in Northern Nevada - Gundlach correlations are positive; mine are negative. As market participants run to safe havens gold and U. Treasurys, they typically retreat from “risk-on” assets like copper.

Recent geopolitical concerns and uncertainty about the timing and efficacy of the new administration’s domestic policies have caused a spike in the GCR and decline in U. Rising gold and declining copper prices raise the GCR while higher bond prices produce lower yields.

Figure 1 is the three-month (Y-axis) and 1-month (X-axis) correlations of Comex copper and Nymex oil (WTI) with Comex gold.