A method of encoding video data, the method comprising: determining, within an encoder, a predicted residual signal of a target color component of a current block as a function of one or more parameters of a linear model and of a residual signal of a source color component of the current block; determining, within the encoder, a remaining residual signal for the target color component based on a residual signal of the target color component and the predicted residual signal of the target color component; encoding values of the remaining residual signal of the target color component; and outputting the encoded remaining residual signal values in a video bitstream, wherein determining a predicted residual signal includes determining one or more parameters of the linear model, wherein determining one or more parameters of the linear model includes: (i) determining a prediction error as a function of reference sample values of a reference target color component and reference sample values of a reference source color component; and (ii) selecting values of the one or more linear model parameters that minimize the prediction error, the selecting including deriving one of the linear model parameters by constraining one of the linear model parameters to be close to a pre-defined parameter value, wherein the reference sample values of the reference target color component and the reference sample values of the reference source color component are first and second color components, respectively, of reconstructed spatial neighboring samples. determining, within an encoder, a predicted residual signal of a target color component of a current block as a function of one or more parameters of a linear model and of a residual signal of a source color component of the current block; determining, within the encoder, a remaining residual signal for the target color component based on a residual signal of the target color component and the predicted residual signal of the target color component; encoding values of the remaining residual signal of the target color component; and outputting the encoded remaining residual signal values in a video bitstream, wherein determining a predicted residual signal includes determining one or more parameters of the linear model, wherein determining one or more parameters of the linear model includes: (i) determining a prediction error as a function of reference sample values of a reference target color component and reference sample values of a reference source color component; and (ii) selecting values of the one or more linear model parameters that minimize the prediction error, the selecting including deriving one of the linear model parameters by constraining one of the linear model parameters to be close to a pre-defined parameter value, (i) determining a prediction error as a function of reference sample values of a reference target color component and reference sample values of a reference source color component; and (ii) selecting values of the one or more linear model parameters that minimize the prediction error, the selecting including deriving one of the linear model parameters by constraining one of the linear model parameters to be close to a pre-defined parameter value, wherein the reference sample values of the reference target color component and the reference sample values of the reference source color component are first and second color components, respectively, of reconstructed spatial neighboring samples.