New ratios preview (ROIC, WACC, and more)

AlgoMan
Tue, 17 Feb 2026 21:58:21 +0000

marco:

We are about to unveil a tool to quickly test IC for any factor or formula. Whether it's from a textbook or novel. We'll see which versions are better.

Please consider to add alternative quality measurement like spread of top and bottom bucket as well. I use IC allot in my analysis, but there is a fundamental limitation of Spearman IC — it measures monotonicity across ALL buckets equally , but for stock picking we care more about the top buckets.

Example
The first screenshot has great top bucket return, but the spearman rank is very low = Will give Low IC

Second screenshot. Half boring quantile top distribution but very high spearman rank = Will give High IC

This is one of there reasons why many AI models do not produce top bucket heavy ranking system, fundamentally many of the calculations focus in the distribution (like IC calculations).

*This is also why catalysts like Market Cap does not always work they way we expect in AI models, took me a while to realize that.