Investment Glossary
Key terms for understanding AI-powered investing
Alpha
The excess return of an investment relative to a benchmark index. Positive alpha indicates outperformance.
AUM
Assets Under Management. The total market value of investments managed by a fund or advisor.
Backtesting
Testing an investment strategy using historical data to see how it would have performed.
Beta
A measure of volatility relative to the overall market. Beta > 1 means more volatile than the market.
Dividend Yield
Annual dividend payments divided by stock price, expressed as a percentage.
Drawdown
The peak-to-trough decline during a specific period, measuring downside risk.
EPS
Earnings Per Share. Company profit divided by outstanding shares.
ESG
Environmental, Social, and Governance criteria used for socially responsible investing.
Feature
In machine learning, a measurable property used as input for predictions (e.g., P/E ratio, momentum).
Fundamental Analysis
Evaluating a stock based on financial statements, earnings, and economic factors.
Hit Rate
The percentage of predictions that correctly forecast the direction of price movement.
IC (Information Coefficient)
Correlation between predicted and actual returns. Higher IC indicates better predictions.
LightGBM
Light Gradient Boosting Machine. A fast machine learning algorithm used for ranking and prediction.
Long-Short Spread
The return difference between top-ranked (long) and bottom-ranked (short) stocks.
Market Cap
Market Capitalization. Total value of a company's outstanding shares (price × shares).
ML Score
Machine Learning Score. ACIS's predicted ranking for a stock based on expected returns.
Momentum
The tendency for assets that have performed well recently to continue performing well.
P/E Ratio
Price-to-Earnings Ratio. Stock price divided by earnings per share.
Portfolio Rebalancing
Adjusting portfolio weights back to target allocations.
Reinforcement Learning
ML technique where models learn optimal actions through trial and error.
ROE
Return on Equity. Net income divided by shareholder equity, measuring profitability.
Sharpe Ratio
Risk-adjusted return metric. Higher values indicate better return per unit of risk.
Technical Analysis
Analyzing price patterns and trading volume to forecast future movements.
Value Investing
Strategy of buying undervalued stocks based on fundamental analysis.
Volatility
Statistical measure of price variation over time. Higher volatility means higher risk.
Walk-Forward Testing
Backtesting method that simulates real trading by training on past data and testing on future data.
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