Terms Beginning With 'r'

Rebalancing

  • January 22, 2020
  • Team Kalkine

Rebalancing is the process of restoring the original weight allocated to the constituents of an index at the time of construction. Many of the market indices are market capitalisation weighted index, and due to the change in the market cap over business activities, the constitutes of an index start experiencing a shift in their original weight in an index. The restoration of the constituents of an index to represent its original allocation is typically known as rebalancing.

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