Why do I need a cold junction compensation for measurements with thermocouples?
Thermocouple sensors don't measure absolute temperatures but the difference between two points. To measure a single temperature one of the junctions is at the temperature to be sensed and the other junction – normally the cold junction – is maintained at a known reference temperature.
Having a junction of known temperature is not convenient for most measurement applications and hence used seldomly. Instead, an artificial cold junction using a thermally sensitive component such as a thermistor or diode is incorporated to measure the temperature of the input connections at the instrument - designed with special care to minimize any temperature gradient between terminals. With that, the voltage from a known cold junction is simulated and the appropriate correction can be applied within the instrument. This principle is called cold junction compensation.