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Price & P/E Regression with Mean Reversion Zones (6 Years)

This indicator is designed to analyze the relationship between a stock's price and its price-to-earnings (P/E) ratio relative to their respective regression trends over a six-year period. Based on research, the indicator highlights mean reversion zones—areas where price and P/E deviate significantly from their historical averages. These zones signal potential overvaluation or undervaluation, providing insights into whether a stock is trading above or below its fair value. By incorporating regression analysis, the tool identifies long-term price and valuation trends, while mean reversion dynamics help anticipate possible corrections or continuations. This approach combines price momentum, valuation insights, and historical behavior to inform both short-term trading opportunities and long-term investment decisions.

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