Read the article about Caliber and Affinity in Modern Trader magazine.
NYSE Update For The Week Of August 14th 2017
The 60-day Caliber rose from 865 to 877 last week so the overall diversity of this market has increased. The number 865 means that over the last 60 trading days the NYSE behaved as if it was made up of 877 completely independent stocks, after individual stock trends were removed. Higher Calibers sometimes coincided with better market conditions in the past but this might not be the case in the future.
The correlation between a stock's return and it's Affinity fell last week and is essentially zero. When this correlation is rising, investors could consider stocks that have higher Affinity rankings. When this correlation is falling, investors might consider stocks with lower Affinity rankings. In general, the market appears to oscillate between favoring high or low Affinity stocks and the correlation tells you where the market is in that cycle. The overall market can rise or fall for any value of this correlation but the periods when this correlation is rising might be the most comfortable for investors.