Keltner Channels: Explained & Coded

Keltner Channels are a technical indicator that combines an exponential moving average with volatility-based envelopes set above and below the EMA at a fixed percentage of the same duration. Keltner Channels aims to identify the …

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Sector Momentum: Explained & Backtested

Sector momentum is a sector rotation strategy to boost performance by ranking sectors according to their momentum, buying top performers, and selling laggards. In this post, I describe sector momentum and why it works and …

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The Cost of Capital

The cost of capital is the weighted average of the cost of equity and the cost of debt. It’s the rate both equity and debt investors demand as a return or the hurdle rate if you’re …

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The Cost of Debt

The cost of debt is the rate at which a company can borrow long-term today. It will reflect the firm’s default risk and the level of interest rates in the market. It is the sum …

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The Cost of Equity

The cost of equity is the return demanded for an individual equity. It’s the return needed for investors to compensate for equity risk, and it’s the cost of equity funding for the company. The cost …

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Beta & Relative Risk

We can add the risk-free rate and the equity risk premium to determine how much the market, or an average risk stock, will return. But what if our stock is more or less risky than …

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