Decile
One of ten equal groups after ranking stocks by something.
Rank a set of stocks by any measure, the borrow fee, last month's return, size, anything, and cut the list into ten equal slices. Each slice is a decile. The top decile holds the ten percent with the highest value, the bottom decile the ten percent with the lowest.
Deciles are how a systematic test asks whether a measure orders returns: if the top decile beats the second, which beats the third, and so on down the list, the measure carries information. If the order is a jumble, it does not. In the logbook that check is called ranking monotonicity.
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Where this word comes up
First needed in the log entry H-059 · Testing the shorting premium: what a rebalancing bug taught us.
From the same entry: Borrow fee, Crowded shorts, Delisted, Long-short portfolio, Rebalance, Recall, Short interest percentage, Short selling, Squeeze, t statistic, Universe.