<p>When analyzing neural data it is important to consider the limitations of the particular experimental setup. An enduring issue in the context of electrophysiology is the presence of common signals. For example a non-silent reference electrode adds a common signal across all recorded data and this adversely affects functional and effective connectivity analysis. To address the common signals problem, a number of methods have been proposed, but relatively few detailed investigations have been carried out. As a result, our understanding of how common signals affect neural connectivity estimation is incomplete. For example, little is known about recording preparations involving high spatial-resolution electrodes, used in linear array recordings. We address this gap through a combination of theoretical review, simulations, and empirical analysis of local field potentials recorded from the brains of fruit flies. We demonstrate how a framework that jointly analyzes power, coherence, and quantities based on Granger causality reveals the presence of common signals. We further show that subtracting spatially adjacent signals (bipolar derivations) largely removes the effects of the common signals. However, in some special cases this operation itself introduces a common signal. We also show that Granger causality is adversely affected by common signals and that a quantity referred to as “instantaneous interaction” is increased in the presence of common signals. The theoretical review, simulation, and empirical analysis we present can readily be adapted by others to investigate the nature of the common signals in their data. Our contributions improve our understanding of how common signals affect power, coherence, and Granger causality and will help reduce the misinterpretation of functional and effective connectivity analysis.</p>