Mean Reversion, A Key Concept in Finance and Trading
berbagiberkat.com – Mean reversion is a fundamental theory in finance and statistics that suggests asset prices, returns, or economic variables tend to revert to their long-term average or “mean” over time. In simple terms, when a price deviates significantly from its historical average—either too high (overvalued) or too low (undervalued)—it is likely to move back…