Rasas Raya, Rasas
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Linear Relation of Two Discrete Signals Cahyono, Edi; Saidi, La Ode; Raya, Rasas; ., Idris
International Journal of Science, Engineering, and Sustainable Technology (IJSESTech) Vol 1, No 1 (2014)
Publisher : International Journal of Science, Engineering, and Sustainable Technology (IJSESTech)

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Abstract

We consider two discrete signals that are discrete functions over time. We introduce a method to approximate one signal in a linear form of the other. The coefficient of the linear expression are obtained by applying a least square method. We present an example by using daily data of exchange rates. If an exchange rate of a currency is in a linear form of the other and there is a time leg, then one may predict the dynamics of a currency based on the dynamics of the other. Investors are interested in predicting the dynamics of exchange rates, stocks and commodity prices, if such prediction exists.