Discover the concept of mean reversion, a financial theory that states asset prices tend to revert to their long-term average. Learn how this impacts investment strategies.

The idea that stock prices revert to a long term level. Hence, if there is a shock in prices (unexpected jump, either up or down), prices will return or revert eventually to the level before the shock ...

Forbes contributors publish independent expert analyses and insights. I write about incisive investing advice. Financial planning is all about managing risk, and using mean reversion is a brilliant ...

The process of mean reversion is built on the presumption that the underlying distribution (whether it be a time series or cross sectional) is stationary and that while there may be big swings from ...

Shorting a proxy of the VIX Index using SVXY can yield over 20% annualized returns since 2019 by utilizing mean reversion. Strategy 1 involves incremental capital allocation at VIX levels of 20, 30, ...

CEO of Paul M. Wendee & Associates, LLC; Publisher of the Intrinsic Value Wealth Report Newsletter; Founder of the Value Driver Institute. In my opinion, reversion to the mean is one of the most ...

Unprecedented government intervention has resulted in a relative calm in markets of late. This intervention is best visualized by reviewing the sectoral balances work. As the de-leveraging process ...

The notion of mean reversion is widely held and deeply adhered to not just in many disciplines but in every day life. In statistics, mean reversion is the term used to describe the phenomenon that if ...