Engine internals

Z-score

In plain English

A z-score is a number that tells you how many standard deviations a value sits away from the mean of its distribution. A z-score of +2 means the value is in the top 2.5% of the distribution; −2 means the bottom 2.5%. Framler z-scores every factor across the live universe so a 70 means top-quintile relative to today's peers.

How it works

Formally z = (x − μ) / σ. Z-scoring is the standard normalisation that lets us compare value (whose raw scale runs from 0 to infinity) against momentum (which runs negative to positive). After z-scoring, every factor lives on the same axis and can be combined into a composite without one factor dominating purely because its raw scale is larger.

Where you see this in Framler
Implicit in every factor card. The 0-100 score on /stocks/[ticker] is a rank-converted z-score.

Related — Engine internals

Framler score (composite)Verdict (BUY/MIXED/SELL)Forward return (expected)Market regime (BOCPD)Conformal prediction intervalTail-dependence (copula)

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Z-score — Framler glossary | Framler