What does historical spread analysis typically involve?

Historical spread analysis typically involves graphing variations over time. This process allows analysts to visually represent how the spread between different financial instruments, such as bonds or commodities, has changed over a specific period. By plotting these variations on a graph, it becomes easier to identify trends, anomalies, and patterns that may inform future trading strategies or investment decisions.

Graphing historical spreads can reveal insights about market behavior, volatility, and the relationship between different instruments. Analysts can observe where spreads have widened or narrowed, which could indicate changing market conditions or economic events impacting pricing. Moreover, these visual trends can help in forecasting future spreads based on past behaviors.

The other options involve different aspects of financial analysis. Computing future rates refers to projections rather than historical data analysis. Comparison of past prices might not focus specifically on spreads, and evaluating current market trends does not emphasize historical variations, making them less relevant to the concept of historical spread analysis.