How CORVIX actually works

CORVIX scores 17 long-run themes against seven checks, reads the current market regime, and shows the reasoning behind every number instead of handing you an output to trust. This page is the long version of that, including what the system does not do.

Seven checks, weighted by what has actually worked

Every theme and every regional read is built from the same seven checks. Each one is weighted by how reliably it has actually predicted outcomes in the past, so a check that has been noisy is pulled toward no influence at all rather than being treated the same as one with a real track record. No single input can dominate the composite score on its own.

• Momentum: price trend relative to the global benchmark over the trailing window.
• Trend: direction and persistence of the move, not just its size.
• Multi-Horizon Consistency: agreement across short, medium, and long lookback windows.
• Structural: whether the underlying secular case still holds, reviewed on a fixed schedule.
• Policy: government and regulatory tailwind or headwind for the theme.
• Flows: where capital is actually moving, not just where sentiment points.
• Cycle Fit: how well the theme tends to perform in the current macro phase.

These combine into one composite score from 0 to 100 per theme, and the same framework is used to read the overall regime, so a theme score and a regime score are directly comparable rather than built on different logic.

Conviction bands

The composite score maps to a conviction band, a plain-English label for how strongly the evidence currently supports a theme:

• High Conviction: strong, broad agreement across checks.
• Constructive: positive case with a few open questions.
• Building: early-stage or mixed evidence.
• Watch: thesis weakening or unconfirmed.
• Dormant: the score has collapsed and the market is no longer confirming the thesis.

A band is a summary, not a black box: every band change is traceable back to which check moved and by how much.

Falsify conditions

Every theme ships with a plain-English condition that would prove the thesis wrong, written down in advance and reviewed on a quarterly cycle. When a theme hits its falsify condition, it moves down a band automatically. This exists specifically to stop a stale conviction from just sitting there unquestioned because nobody wanted to revisit it. Themes are graded against the condition, not against how they're doing overall, which is what keeps the check honest.

Business Cycle classification

Every region CORVIX covers — not just the US — gets its own Business Cycle classification: Early, Mid, Late, or Recession. Each region is scored independently from its own growth, credit, policy, and momentum data, not inferred from the US and stretched over the rest of the world. Two axes are computed, each a weighted blend of several inputs: Activity Level (manufacturing PMI and GDP growth) and Activity Momentum (leading-indicator momentum, credit-spread direction, and a policy-stance read combining real interest rates with the yield curve). Where the two axes land together determines the stage.

Two categories in the underlying rubric — corporate profits and inventory levels — don't have official statistics that update in real time, so CORVIX uses a labeled proxy rather than leaving them stale for months: 6-month equity momentum stands in for profits, and PMI direction stands in for inventories. Every category in the classification names which signal actually fed it, proxy or not. A small buffer zone around each axis's zero line keeps a region from flipping stage on noise alone, and if both PMI and GDP are missing for a region in a given cycle, its stage holds at the last confirmed reading instead of guessing from an incomplete picture.

Satellite Rotation and the cycle stage

Two parts of CORVIX use a region's own Business Cycle stage directly in scoring, not just as a display. Satellite Rotation ranks industries within a region on a composite of valuation, momentum, trend, and crowding, plus a cycle-fit factor: sectors that have historically led or lagged in the current stage — Financials and Discretionary in an Early expansion, Staples and Utilities in a Recession, for example — are tilted accordingly, based on that region's own classification. Risk & Defense applies a related but separate tilt to how heavily each risk category is weighted: credit and curve indicators weight up in a Late or Recession stage, valuation caution weights down specifically in a Recession (cheap multiples are a weak signal when earnings themselves are falling), and Mid-cycle applies no tilt, serving as the baseline. Every tilt multiplier ships alongside the underlying indicator, so its effect on a score is never hidden inside the number.

Why this is expressed as weights

Every output on this site resolves to a weight rather than a name: how much long-run theme exposure, how much sector rotation, how much defence. That is a deliberate choice, and it is the one part of the design with the most external support behind it.

Studies of balanced mutual funds and pension funds have repeatedly found that a portfolio’s allocation policy, not the individual securities inside it, accounts for the large majority of how its return varies over time — on the order of 90% of that variation. The same work is careful about what this does not mean: allocation explains far less of the variation between different funds (nearer 40%), and the figures are often quoted more loosely than the research supports. What survives the caveats is the part that matters here: the mix is the lever with the most reliable effect on the outcome.

So CORVIX puts the mix in front of you and lets you move it, rather than issuing a list of tickers. It is also why the weight controls are the thing to experiment with first.

Point-in-time backtesting

A backtest is only useful if it reflects what an investor could have actually known and done at the time. CORVIX's backtester uses only data through the prior period at every step, no look-ahead, and applies transaction costs on turnover so a strategy that trades often doesn't look artificially cheap. The signal overlay can be toggled on or off to isolate exactly what a given signal contributed to risk-adjusted return, separate from the underlying benchmark.

Update cadence

Core signals refresh hourly. Market prices refresh daily after major exchanges close. Structural and policy checks, which by nature don't change hour to hour, are reviewed on a fixed quarterly schedule rather than being left stale indefinitely or refreshed so often that noise gets mistaken for signal.

What CORVIX does not do

This section exists because a methodology page that only lists strengths isn't a complete one.

• CORVIX does not predict exact price levels or exact dates for a move. Conviction bands and correction risk are reads on current evidence, not forecasts of what happens next.
• CORVIX does not manage money, place trades, or act as a broker. It is a research and monitoring tool.
• CORVIX does not account for an individual's tax situation, liquidity needs, or personal risk tolerance. Position sizing and suitability are the user's responsibility.
• CORVIX's backtests describe how a strategy would have performed on historical data. Past performance, backtested or live, does not indicate future results.
• CORVIX is not a registered investment advisor and does not provide personalized investment advice. See the full disclaimer for details.