What is Mean Reversion In Stock Market? Mean Reversion is a commonly used concept in the stock market. The concept has led to many investment strategies as it capitalises on changes in the price ...

Mean reversion trading tries to take advantage of extreme changes in the price of a particular security/industry, betting an opposite action will soon occur to bring long-term conditions back ...

The key difference between a mean-reverting process and a random-walk is that after the shock, the random-walk price process does not return to the old level.

The pressure to outperform all of the time leads stock pickers to constantly seek mean reversion trades.

The rise of giant capital light businesses has stalled the cycle of regression to the mean of corporate returns on equity, says GMO's Jeremy Grantham.

Based on the Pain of mean reversion chart we are trading somewhere between 30 and 10 times earnings. However, neither number is very meaningful.