Decoded Intelligence Signal
Engle-Granger Test
advanced
strategy
Verified: May 27, 2026Lexicon Core Definition
A two-step statistical test for cointegration between two time series: Step 1 regresses one series on the other to obtain residuals; Step 2 applies the ADF test to those residuals — if stationary (p < 0.05), the pair is cointegrated and suitable for pairs trading.
Analysis Breakdown
A two-step statistical test for cointegration between two time series: Step 1 regresses one series on the other to obtain residuals; Step 2 applies the ADF test to those residuals — if stationary (p < 0.05), the pair is cointegrated and suitable for pairs trading. Full explanation coming soon when Journey 22 content is ingested.