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AI supply chain term

Decile spread

The forward return of the engine’s top-decile names minus its bottom decile, over the week after a recorded night - the money version of the rank IC.

What it means

Take one recorded night, sort every scored name into deciles, and compare how the top tenth moved over the following seven days against the bottom tenth. That difference is the decile spread - the most direct translation of “the ranking works” into portfolio terms, because a long-the-top, avoid-the-bottom reading would have captured exactly that gap. THE ENTITY computes it nightly from the immutable record, a week in arrears so the grading is out-of-sample, and shows the rolling series on the Scorecard next to the rank IC and the per-verdict cohort returns.

Why it matters to investors

The spread answers “so what?” about correlation numbers: it is measured in percent, the unit portfolios live in. Watch whether it stays positive across many nights - one good week proves nothing, a persistent spread is the signal.

Related terms

Information coefficient (rank IC)The rank correlation between one night’s conviction scores and the price moves that followed - did higher-scored names actually move more?Hit rateThe share of resolved recorded calls that moved the way the engine said - always quoted with the number of calls behind it.VerdictThe engine’s per-company call band - STRONG BUY, ACCUMULATE, HOLD, TRIM or AVOID - derived from the conviction score and recorded nightly.

See Decile spread in the live AI chain.

THE ENTITY maps every constraint onto one live model - which part is tight now, who owns it, and who gets squeezed when it moves. Plain-English reads you can check.

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THE ENTITY is an educational read on the AI supply chain - research, not investment advice. It explains how the chain works and who sits where, never price targets or buy/sell calls.