  Analog Network Coding (ANC) is proposed in literature to improve the network
throughput by exploiting channel diversity. In practical scenarios, due to the
difference in channel characteristics, an extra residual component, termed as
ANC noise, appears during the processing of the received signal. This ANC noise
component may suppress the ANC gain. None of the existing literature to our
knowledge considers the effect of spatial correlation among channels on ANC
noise. This paper develops a generic framework to investigate the effect of
channel characteristics on ANC noise. We have modelled the channels as
spatially correlated to take the (dis)similarity among them into account. Per
node power constraint is also taken into consideration. In this work, we have
characterized the behaviour of ANC noise and presented the results to analyze
the network performance in terms of outage probability. Outcomes of our
investigation show that spatial correlation among channels significantly
affects the variance of ANC noise as well as the outage performance of the
system. The proposed framework can provide better insights while selecting the
system parameters in a correlated environment.
