Home > Glossary > Intermarket analysis

Intermarket Analysis

Intermarket analysis is a method of analyzing the relationships between different asset classes, such as stocks, bonds, commodities, and currencies, to identify trends and potential investment opportunities. It examines how these markets interact with one another, recognizing that the performance of one market can influence or signal changes in another. Intermarket analysis is commonly used in technical analysis to assess the broader economic picture and understand cross-asset correlations.

Example

An intermarket analyst might observe that rising bond yields often lead to a decline in stock prices, using this information to predict market movements.

Key points

• Analyzes relationships between asset classes like stocks, bonds, commodities, and currencies.

• Used to identify trends and potential investment opportunities.

• Helps assess economic conditions and cross-asset correlations.

Quick Answers to Curious Questions

The purpose is to understand how different asset classes interact, identifying trends and signals that may affect investment decisions.

It helps investors recognize correlations between markets, such as how changes in commodity prices might influence stock performance, allowing for more informed investment strategies.

Analysts often study relationships between bonds and stocks, commodities and currencies, and other cross-asset interactions to predict market movements.