3.

Sand Storm! 2010: Act II, Scene 3-4; Log Absolute Return Rate Depends Linearly on Risk.

The example static chart shows evidence that this surprising relationship holds true for the entire dataset. The two animations which it summarizes further show that the relationship is quite good at every analysis date. That is, the least squares best fit straight line shown at the center of the chart almost always lies completely inside the two outer straight lines, as can be seen on the Blu-ray. The dots show the Return Rate and Risk measurements for all stocks in the dataset at all of the end-of-week analyses. The outer lines mark the plus and minus one standard deviations about the central fitted line.

The utility of this observation is that significantly unusual behavior of a stock easily can be detected in this rate domain. If a stock with low measured Risk begins to change its Return Rate very rapidy, this signals unusual behavior worth further investigation.

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