Third Derivative
Pries Capital Macroeconomic Framework • 52s
Pries Capital’s Third Derivative
Points of discussion:
• The third derivative of position represents “jerk,” or the change in acceleration over time.
• The third derivative, or higher derivatives for that matter, are generally used to “improve the accuracy of an approximation to the function.”
• In the simplest of terms, the velocity in rate of change.
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Up Next in Pries Capital Macroeconomic Framework
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Bottom-Up Economic Environment
Pries Capital’s Bottom-Up Economic Environment
Points of discussion:
• Bottom-Up processing is a form of information processing.
• A Bottom-Up process has the advantage of being more unprejudiced and the outcome can discover new critical factors from the economic environment.
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Sharpe Ratio
Pries Capital’s Sharpe Ratio
Points of discussion:
• The Sharpe Ratio is used to help investors understand the return of an investment compared to its risk.
• The ratio is the average return earned more than the risk-free rate per unit of volatility or total risk.
• Generally, the greater the va... -
Dispersion
Pries Capital’s Dispersion Model
Points of discussion:
• Dispersion refers to the range of potential outcomes of investments based on historical volatility or returns.
• Dispersion can be measured using alpha and beta, which measure risk-adjusted returns and returns relative to a benchmark index...
