Mean reversion: Difference between revisions
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Amwelladmin (talk | contribs) (Created page with "{{a|glossary|}}{{d|Mean reversion|/miːn rɪˈvɜːʃᵊn/|n|}} A financial assumption that an asset’s price will tend to converge to its average price over time, or the economic constraints over time that should, rationally control the price. So house prices and incomes should bear a constant relationship over time, and if house prices get out of whack, as they tend to do, the effect will be transitory.") |
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Revision as of 09:04, 19 April 2024
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Mean reversion
/miːn rɪˈvɜːʃᵊn/ (n.)
A financial assumption that an asset’s price will tend to converge to its average price over time, or the economic constraints over time that should, rationally control the price. So house prices and incomes should bear a constant relationship over time, and if house prices get out of whack, as they tend to do, the effect will be transitory.