Stock Trading News

What Is a Frequency Distribution? A frequency distribution is a table that displays the frequency of various outcomes in a sample. The first column lists each unique value (or category) of the variable in question, and the second column lists how often that value occurs. For example, imagine you surveyed 100 people about which type […]

WACC stands for the weighted average cost of capital. WACC (commonly pronounced “whack”) is the average of the costs of all capital, including equity and debt, that a company has raised to finance its operations. WACC is used to discount a company’s future cash flows back to present value, in order to determine whether or […]

What Is Return on Invested Capital (ROIC)? Return on invested capital (ROIC) is a financial ratio that measures the profitability and efficiency of a company’s use of capital. It is commonly used to assess whether a company is using its resources in an efficient manner, and it is considered to be a good indicator of […]

Diversification has long been considered a crucial component of successful investing and trading, helping to reduce risk by spreading your trades and investments across a variety of assets, asset classes, countries, and currencies. However, in today’s world, achieving diversification has become more challenging. Inflation, geopolitical risks, and the need for inflation protection all present significant […]

A hedge fund and private equity firm both serve a similar purpose in that they both seek to generate returns on investment. However, there are key differences between the two. Hedge funds typically use more aggressive strategies involving liquid investments relative to private equity firms, which focus on illiquid investments. Hedge funds are typically open-ended […]

Spread trading is a trading strategy that involves buying and selling two related financial instruments in order to profit from the difference between their prices. This difference is known as the “spread.” Spread traders aim to make money by betting on the direction in which the spread between two instruments will move (e.g., convergence, divergence), […]

Covariance measures the directional relationship between two variables. Covariance is used in portfolio theory and modern portfolio theory. Covariance is a statistical measure that calculates the degree to which two variables vary together. Covariance can be positive or negative, and it is typically represented by a covariance matrix. Covariance is used in finance to measure […]

Market risk premium is the expected return of a market portfolio versus the risk-free rate. It is used as compensation for investors who are taking on additional risk by investing in the market instead of a risk-free asset like government bonds. The market risk premium can be used to calculate the expected return of individual […]

The quality of a company and which financial, operating, investing, and business metrics to use to assess it can be subjective because it largely depends on its purpose. A for-profit company has a different type of purpose than a non-profit. In this case, we are going to consider the question from the vantage point of […]

Over the long run, an economy boils down to productivity. When we trade markets and invest our money, our goal is to generate income. That income, over the long run, is a function of productivity and is the biggest driving force of economies over time. In the near term, it’s economic cycles that make the […]