Mean reversion: related pages

Random walk

Price changes in securities that are (a priori) purely random. Expected behaviour in efficient markets.

Efficient markets

A market in which securities prices reflect all available information.

Cockroach Theory

The idea that one piece of bad news is likely to be followed by further bad news.

Weighted moving average

A moving average weighted towards more recent values.

Fisher hypothesis

The Fisher hypothesis, suggests that, in the long run, inflation and nominal interest rates move together, implying that real interest rates are stable in the long term.