Mean Reversion
Overview
A mean reverting series is one where the change in the series from one time period to the next
is negatively correlated with the difference between the series at the prior point and the series mean.
{% \Delta X_{t+1} = -\alpha(X_t - \mu)+ \epsilon_{t+1} %}
Trend Reverting
A trend reverting series is one where there is a deterministic trend for which the series reverts back to.
{% \Delta X_{t+1} = -\alpha(X_t - trend_t)+ \epsilon_{t+1} %}
