Related Experiment Video
Updated: Aug 14, 2026

Divergence of Root Microbiota in Different Habitats based on Weighted Correlation Networks
Published on: September 25, 2021
Detecting a currency's dominance or dependence using foreign exchange network trees
Mark McDonald1, Omer Suleman, Stacy Williams
1Mathematics Department, Oxford University, Oxford, OX1 2EL, United Kingdom.
Abstract:
In a system containing a large number of interacting stochastic processes, there will typically be many nonzero correlation coefficients. This makes it difficult to either visualize the system's interdependencies, or identify its dominant elements. Such a situation arises in foreign exchange (FX), which is the world's biggest market. Here we develop a network analysis of these correlations using minimum spanning trees (MSTs). We show that not only do the MSTs provide a meaningful representation of the global FX dynamics, but they also enable one to determine momentarily dominant and dependent currencies. We find that information about a country's geographical ties emerges from the raw exchange-rate data. Most importantly from a trading perspective, we discuss how to infer which currencies are "in play" during a particular period of time.
Related Concept Videos
Survival Tree
Building a Survival Tree
Constructing a survival tree begins...
First Derivative Test: Problem Solving
Central Tendency: Analysis
The mean is one such measure, calculated by totaling all values in a dataset and dividing by the number of values. For instance, the mean blood pressure reading (120, 130, 140, 150) would be 135. However, the mean can be affected by extreme values or outliers.
The median, another measure,...
Node Analysis for AC Circuits
To unravel the complexities of this system, nodal analysis is employed, a powerful technique founded on Kirchhoff's current law (KCL), which remains valid for phasors. AC circuits can effectively be...
Net Change Theorem
Time-Series Graph