What is segmentation by rank?
Segmentation by rank is a decile analysis ranking the data points by the where they fall in ranked order against the total number of data points. Each decile will compose 10% of the data points in the data set. The data points are sorted by value descending, then put into a decile bucket that represents their significance to the number of data points. Example: Data: stock, value, cumulative position, % of data points, decile a 21 1 5% 1 b 20 2 10% 1 c 19 3 14% 2 d 18 4 19% 2 e 17 5 24% 3 f 16 6 29% 3 g 15 7 33% 4 h 14 8 38% 4 i 13 9 43% 5 j 12 10 48% 5 k 11 11 52% 6 l 10 12 57% 6 m 9 13 62% 7 n 8 14 67% 7 o 7 15 71% 8 p 6 16 76% 8 q 5 17 81% 9 r 4 18 86% 9 s 3 19 90% 10 t 2 20 95% 10 u 1 21 100% 10 In the example above you can see that the first 16 stocks comprise 80% of the data points for all of the listed stocks. While the last 5 stocks comprise 20% of the the data points. This ranks the stocks relative to the number of data point rather than to the sum of the value.
