Finance Terms
A glossary of financial vocabulary—learn to speak the language of the markets
Expected Shortfall (CVaR) 95% and 99%: practical guide
Understand CVaR 95% and 99%, how it differs from VaR, and how to use tail-risk metrics for portfolio decisions.
Skewness and Kurtosis: practical guide for portfolio risk
Understand skewness and kurtosis, how to read return-distribution shape, and why tails matter for risk decisions.
Recovery Factor: formula, interpretation, and limits
Recovery Factor shows how efficiently a portfolio recovers from drawdowns. Learn the formula, practical reading thresholds, and common …
Value at Risk (VaR) 95% and 99%: practical guide
Understand VaR 95% and 99%, historical vs parametric methods, and how to use VaR in portfolio decisions without common mistakes.
What is expected return and how to use it
A practical guide to understand expected return, read it inside Wallible reports, and compare it with other performance metrics.
Calmar Ratio and Ulcer Index
How to judge risk-adjusted growth and drawdown pain with two essential risk management metrics.
Understanding Correlation in Investment Portfolio Management
Investment portfolio management is an essential aspect of financial planning, and investors must make informed decisions to optimize their …
How to Use Discounted Cash Flow to Evaluate a Company
When evaluating a company, one of the most important factors to consider is its ability to generate cash flow. However, it is not just the …
Maximum Drawdown Meaning (MDD): Formula, Max Drawdown Example
Maximum drawdown meaning, max drawdown formula, and practical MDD interpretation to compare downside portfolio risk.
The importance of ROE (Return on Equity) in company valuation
ROE is an important valuation metric because it indicates how efficient the company is in the use of its capital. A company with a high ROE …
Compound interest: the secret to growing your savings
Let's see what compound interest is and how it affects the exponential increase in value of one's investment portfolio over the years
Fear Greed Index: the indicator that reveals market sentiment
Today we look at this index that measures market sentiment and try to understand how it can be exploited in times of particular market …
Pension funds in Italy: does it make sense? And what are the pros and cons
The importance of having a pension fund is a crucial issue for the financial stability of our future. In a country like Italy, where it is …
Price/Earning (PE) and Price/Earning to Growth (PEG): how to use these financial indicators to make investment decisions
Let's look at these two financial indicators and how they can be used among the parameters to assess the goodness of a company for its …
Capital Asset Pricing Model (CAPM)
Let's take a look at how CAPM works and how this model is used in finance
Analysis of Variance (ANOVA)
Let's look at how analysis of variance (ANOVA) is defined and how it is used in finance
What Does TWR Mean? Formula, TWRR Example, and Use Cases
TWR meaning, TWR formula, and TWRR use cases to evaluate portfolio performance without cash-flow distortion.
Alpha in finance
Let's see how the alpha coefficient is defined and try to understand how this technical investment risk index is used
Beta in finance
Let's see how the beta coefficient is defined and try to understand how this technical investment risk index is used
Money-Weighted Rate of Return
Let's see how the money-weighted rate of return is defined and how it can be used to assess one's return on investment portfolios, …
What you should know about inflation
Let's take a closer look at the concept of inflation and why it is important to know it for one's investments
Average Annual Return (AAR)
Let's see how Average Annual Return is defined and how to evaluate it for an investment portfolio
Maximum drawdown
We better understand how to interpret the maximum drawdown of an investment portfolio and use it to understand whether different assets meet …
Compound annual growth rate (CAGR)
Let's see how the compound annual growth rate is defined and how to calculate this value on your investment portfolio
Volatility
Let's see how volatility is defined and how to assess risk in an investment portfolio
What Is Sharpe Ratio? Meaning, Formula, and Good Value Ranges
What is Sharpe ratio, how to use the Sharpe formula, and what is considered a good Sharpe ratio for portfolio decisions.
