What is Mean Reversion?
Mean Reversion — The tendency of prices or returns to drift back toward their long-term average after extremes.
In simple terms
Mean-reversion strategies bet that stretched moves will unwind.
Why Mean Reversion matters when you invest
Understanding mean reversion helps you make better-informed decisions when you invest and trade on ROAR by DP TradeKING. Open a free account to put it into practice — ₹0 delivery brokerage and zero-commission direct mutual funds.
Mean Reversion — frequently asked questions
What is Mean Reversion?
The tendency of prices or returns to drift back toward their long-term average after extremes.
What does Mean Reversion mean in the stock market?
The tendency of prices or returns to drift back toward their long-term average after extremes. Mean-reversion strategies bet that stretched moves will unwind.
Can you give an example of Mean Reversion?
Mean-reversion strategies bet that stretched moves will unwind.
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