Beta is a measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM) to calculate the expected return of an investment. A stock with a beta greater than one is …

Cointegration is a statistical property of certain types of data that indicates a strong relationship between them. When two variables are cointegrated, it means that they move together over time and tend to return to the same level after periods of divergence. This makes them ideal candidates for pairs trading, …

A mutual fund is an investment vehicle that is made up of a pool of funds from many different investors. The money in the fund is then used to purchase a variety of different securities, such as stocks, bonds, and other assets. Mutual funds are a popular way for investors …

Technical analysis is the study of past price patterns to identify market trends and trading opportunities. Technical analysts believe that the collective actions of all participants in the market, including buyers and sellers, producers and consumers, investors and speculators, etc., influence asset prices. By analyzing price data, technical analysts aim …

In the financial markets, herding behaviour is often exhibited by investors following the crowd and buying or selling assets based on the actions of others, rather than making their own independent decisions. This can lead to market bubbles and crashes as everyone rushes to buy or sell at the same …

Implied volatility is a measure of the expected fluctuations in a security’s price. It is used by options traders to gauge the market’s expectations for the future volatility of the underlying security. A higher implied volatility means that the market is expecting a greater price movement, while a lower implied …

Inflation is often thought of as a rise in the prices of goods and services. While this is true, inflation is actually an increase in the money supply. When there is more money chasing after goods and services, prices will naturally rise. This puts investors in a difficult position because …

Max pain theory is a theory that suggests that the stock price movements are influenced by the options’ expiration. The max pain theory posits that the underlying asset of an option will move in such a way that it causes the most pain to the largest number of option holders. …

The VIX index is a measure of the stock market’s expectation of volatility over the next 30 days. The VIX futures are derivative contracts that allow traders to bet on the future direction of the VIX index.  The VIX index is calculated using the prices of SP500 options. The VIX …

Cryptocurrency is a digital or virtual asset that uses cryptography to secure its transactions. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Cryptocurrencies are often traded on decentralized exchanges and can also be …