· Analytic
Z32645 LC Peer-Complex Co-Movement Signal
Peer-complex 20-day return weighted by rolling 63d R-squared of LC vs peers — Grade C+ systematic common-factor signal.
At a glance
Current reading
-0.923
Peer-Composite Bear Regime EXTREME NEG firing
Signal state
Moderate NEG
phase -1, peer basket down + common-factor active
Sample
Daily, 36-year span
Peer-weighted 20d return, 1990+
Historical IC
+0.045 (p = 1.8e-05)
Spearman vs LC fwd60d, significant daily
Baseline LC fwd60d
+1.02%
Unconditional mean
Peer Bull fwd60d
+1.50% mean
+0.48 pp above baseline, 60% hit rate
As of Oct 30, 2026. Updated nightly.
OBJECTIVE
Live Cattle is not an isolated market — it co-moves with other meats (Feeder Cattle, Lean Hogs) and with the feed complex (Corn). This co-movement varies over time. During common-factor regimes, LC moves tightly with the peer complex. During idiosyncratic regimes, LC moves on its own fundamentals. This signal reads the peer-composite 20-day return (other meats + corn), weighted by the rolling 63-day R-squared of LC regressed on the peer composite, z-scored and bounded with tanh. When common-factor share is HIGH (R-squared high), the peer composite move is AMPLIFIED as the signal: LC is likely to follow. When common-factor share is LOW, the peer signal is dampened and LC trades on its own drivers. State thresholds at plus or minus 0.2 (moderate) and plus or minus 0.5 (extreme). Daily release cadence. The memorable finding: Grade C+ systematic signal. Daily Spearman IC against LC fwd60d is +0.045 at p-value 1.8e-5 across 9,049 observations — significant daily. Non-overlapping (every-60-day) IC is at p-value 0.79 — not significant. Phase +1 (Peer-Composite Bull Regime) delivers +1.50% fwd60d (+0.48 pp edge, hit 60%). Phase -1 (Peer-Composite Bear Regime) delivers +0.41% fwd60d (-0.61 pp edge, hit 55%). Phase 0 delivers +1.23%. The signal captures amplified peer momentum. Current reading: Peer-Composite Bear Regime EXTREME NEG firing at composite -0.923. The peer complex is trending down and common-factor regime is live — LC likely to follow weakness. Read on for the anchors and how to pair with the LC fundamental stack.
LIVE CHART
LC Peer-Complex Co-Movement Signal
Composite reads -0.923 as of October 30, 2026, deeply in the Peer-Composite Bear Regime EXTREME NEG band. Other meats and corn are trending down and LC-to-peer R-squared is elevated. CME Live Cattle (orange) has traded in the \$220-230 range.
COMPOSITE
-0.923 / tanh
STATE
Peer-Composite Bear Regime
PHASE
-1
FWD 60d
+0.41% (baseline +1.02%)
SAMPLE N
9,049 days
STATE-CONDITIONAL EDGE
Forward 60-day returns by state
FORWARD 60-DAY RETURNS BY STATE
Mean forward-60-day benchmark return per composite state. Baseline (horizontal line) is the unconditional sample mean. Bars above the line are the constructive bands; bars below are the bearish bands.
TODAY’S PLAYBOOK READING
STATE
Moderate Neg
STATE AND HISTORY
Peer-Composite Bear Regime EXTREME NEG firing, 40 days running. Phase -1 historically delivers mean fwd60d LC +0.41%, hit 55%, -0.61 pp below baseline. Phase +1 delivers +1.50% / 60% hit / +0.48 pp above baseline.
THE COMMON-FACTOR MECHANISM
When LC-to-peer R-squared is high (common-factor regime), the peer-composite move is amplified as signal: LC follows. When R-squared is low (idiosyncratic regime), the peer signal is dampened and LC trades on its own drivers.
HOW TO POSITION
Pair with LC-corn ratio, FC-LC spread, cattle inventory, term structure. Peer-complex is a systematic cross-market overlay distinct from LC-specific fundamentals — captures when LC is moving with the broader meat/feed complex.
WHAT THE CHART SHOWS
The composite sits at -0.923 deeply in the Peer-Composite Bear Regime EXTREME NEG band. The blue signal line has saturated below -0.9 as the peer complex (FC, Corn, LH) trends down with LC-to-peer R-squared elevated. CME Live Cattle (orange) has traded in the \$220-230 range.
TOP INPUTS FIRING
- Primary composite -0.923 State Peer-Composite Bear Regime EXTREME NEG firing, 40 days running.
- Peer complex trending down Other meats (FC, LH) + corn 20-day return is deeply negative; LC-to-peer R-squared elevated — common-factor regime active.
- State-conditional edge: -0.61 pp mean Peer Bear Regime historical fwd60d LC mean +0.41%, baseline +1.02%, hit 55%. Current firing deeply in EXTREME NEG sub-band — modest headwind.
THE TAKEAWAY
What this means for you today
THE PEER-COMPLEX CALL
Composite -0.923, Peer-Composite Bear Regime EXTREME NEG firing. Other meats + corn are trending down and LC-peer R-squared is elevated — LC is in common-factor regime with the bear peer basket.
THE EMPIRICAL CONTEXT
Peer-Composite Bear Regime historically delivers mean fwd60d LC +0.41% (-0.61 pp vs baseline, hit 55%). Current firing is deeply in EXTREME NEG sub-band.
THE HONEST CAVEAT
Daily IC +0.045 significant. Non-overlap test not significant. Grade C+ systematic overlay with modest directional edge at the tails.
THE REGIME MAP
The three states, forward returns and sample share
Computed from 9,049 trading days with observable LC fwd60d. Baseline LC fwd60d (unconditional): plus 1.02 percent mean. Grade C+ systematic common-factor overlay with 1 pp spread between tails.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| Peer-Composite Bull Regime | +1 | 37.6% (3406 d) | +1.66% | +0.63pp | Oct 2026, Sep 2026, Apr 2026 | |
| Normal | 0 | 24.2% (2191 d) | +1.29% | +0.27pp | Oct 2026, Oct 2026, Oct 2026 | |
| Peer-Composite Bear Regime TODAY | -1 | 38.1% (3452 d) | +0.61% | -0.42pp | Oct 2026, Oct 2026, Oct 2026 |
The historical pattern
Signature episodes in the 36-year sample
What this measures
The signal computes the peer-composite 20-day return (weighted basket of other meats + corn), weighted by the rolling 63-day R-squared of LC regressed on the peer composite. Z-score on 504-day rolling window with 60-day minimum sample. Tanh-bounded to [-1, +1]. State thresholds plus or minus 0.2 (moderate) and plus or minus 0.5 (extreme). Daily release.
Why it matters
Why peer co-movement reads common-factor regime
Live Cattle correlates with other meats (Feeder Cattle, Lean Hogs) and with the feed complex (Corn). This correlation varies over time. During common-factor regimes (crises, macro shocks, agricultural cycles), LC-to-peer R-squared is elevated and LC moves tightly with the peer complex. During idiosyncratic regimes (LC-specific fundamentals dominate), R-squared is low and LC trades on its own drivers. The signal weights the peer-composite move by this regime indicator to amplify high-R-squared signals.
Why Grade C+ with weak independence
Daily Spearman IC against LC fwd60d is +0.045 at p-value 1.8e-5 across 9,049 observations — significant daily. Non-overlapping (every-60d) independence test at p-value 0.79 — not significant. Phase +1 (Peer Bull Regime) delivers +0.48 pp above baseline, Phase -1 (Peer Bear Regime) delivers -0.61 pp below baseline. 1 pp directional spread. Grade C+ systematic common-factor overlay.
How to use this signal today
Pair with the LC-corn ratio signal (feedlot-margin primary driver), FC-LC spread (replacement-cost), cattle inventory (structural supply), term structure. Peer-complex is a systematic cross-market overlay distinct from LC-specific fundamentals — captures when LC is moving with the broader meat/feed complex vs trading on its own.
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Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 01, 2026 01:17 PM ET