Lead–lag effect

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In climate science, changes in temperature (red) are often set to have had a "leading" effect on carbon dioxide (blue), which lagged behind until modern times.<ref>Template:Cite journal</ref>

A lead–lag effect describes a relationship where one (leading) variable is cross-correlated with the value of another (lagging) variable that follows the leading variable's change at a later time.<ref>Template:Cite encyclopedia</ref>

In nature and climate, bigger systems often display more pronounced lag effects. The Arctic Sea Ice minimum is on September 17, three months after the peak in daylight (sunshine) hours in the northern hemisphere, according to NASA.<ref>NASA, "2014 Arctic Sea Ice Minimum Sixth Lowest on Record," http://www.nasa.gov/press/2014/september/2014-arctic-sea-ice-minimum-sixth-lowest-on-record/</ref>

For example, economists have found that in some circumstances there is a lead-lag effect between large-capitalization and small-capitalization stock-portfolio prices.<ref>Andrew W. Lo and A. Craig MacKinlay, "When are contrarian profits due to stock market overreaction," Review of Financial Studies 3 (2), 175-205 (1990).</ref>

(A loosely related concept is that of lead-lag compensators in control theory, but this is not generally referred to specifically as a "lead-lag effect.")Template:Citation needed

References

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