What is Seasonality?

Seasonality is the study of recurring patterns and tendencies in asset prices that occur at specific times of the year, month, or week. While not a guarantee of future performance, analyzing these historical trends can provide a statistical edge and valuable context for current market behavior.

How to Interpret the Charts

• Heatmaps: These show the average historical return for a given period (e.g., each month of the year). Green indicates a historically positive average return, while red indicates a negative one. The intensity of the color reflects the magnitude of the average move.
• Summary Statistics: This table provides key metrics like the "Win Rate" (P(+)), which is the percentage of time that period was profitable historically, and the average gain or loss.
• Annual Returns: This chart overlays the cumulative return for each year, allowing you to see how the current year is tracking against historical paths and identify outlier years.

Practical Applications

• Identify periods that have historically offered a bullish or bearish edge for an asset.
• Time entries or exits to better align with historical tailwinds or headwinds.
• Develop context for whether current price action is "normal" or anomalous for the time of year.