Mondael glossary
Definitions for the forecasting, prediction-market, pricing, liquidity, correlation, order-book, desk, outcome, and alert terminology used throughout Mondael.
Market terms
- Probability
- The market-implied likelihood of an outcome, expressed as a percentage.
- Volume
- The value traded over a stated period.
- Liquidity
- Market-level liquidity as reported directly by the data source API.
- Spread
- The difference between the best available bid and ask prices.
Order book
- Resting Orders
- Mondael’s computed sum of all open bids and asks, including orders resting away from the current price.
- Bid Book
- The aggregated value of all open buy orders for a contract.
- Ask Book
- The aggregated value of all open sell orders for a contract.
- 5pp Depth
- Total order value within 5 percentage points of the current price on both sides of the book.
Mondael terms
- Desk
- A subject-area grouping such as macro, politics, or technology.
- Outcome
- One possible result represented by a prediction-market contract.
- Alert
- A notable event detected from price, volume, liquidity, or order-book activity.
- Resolution criteria
- The source and conditions used to determine the final outcome.
Forecast accuracy
- Brier score
- The mean squared difference between forecast probabilities and actual outcomes. A score of zero is perfect, so lower Brier scores indicate better forecasting accuracy.
- Brier Index
- Mondael’s percentage-style rescaling of Brier score, calculated as (1 - sqrt(score)) x 100%. Higher Brier Index values indicate better forecasting accuracy.
- Brier score ratings
- Strong (< 0.03): very accurate forecasting.
- Good (0.03–0.08): solid forecasting accuracy.
- Mixed (> 0.08–0.15): uneven forecasting accuracy.
- Weak (> 0.15): low forecasting accuracy.
These are Mondael display bands, not universal standards.
Correlation and Markets
Mondael uses the Pearson correlation coefficient. Values are stored in parts per million (PPM): divide by 1,000,000 for the coefficient or by 10,000 for a percentage. For example, -227729 PPM is r = -0.228, or -22.8%. Correlation does not imply causation.
- Correlation at zero
- Same-time correlation, calculated without shifting either hourly series. Positive values generally move together, negative values move oppositely, and values near zero show little same-time relationship.
- Correlation
- The signed Pearson correlation at the reported lead/lag. +100% means the values moved perfectly together, 0% means no linear relationship was detected, and −100% means they moved perfectly in opposite directions.
- Maximum absolute correlation
- The magnitude of the best-lag correlation without its sign: the absolute value of the signed best-lag correlation. It is useful for magnitude comparisons.
- Relationship strength
- The absolute correlation after applying a lag-distance penalty. A high raw correlation that requires a long lead or lag can therefore have lower strength.
- Quality
- A heuristic indicating how usable the relationship is, based on correlation strength and sample coverage. Sparse samples cap quality below 50%. It is not a probability, confidence interval, or statistical significance test.
- Lead / lag
- Identifies which side moved first and the estimated time between movements. This uses the API’s leader role and is not inferred from the correlation sign. Zero lag means there is no clear lead.
- Direction
- Positive means movement in the same direction; negative means opposite movement; mixed means same-time and lagged signs disagree; none means no meaningful direction was identified.
- Samples
- The number of overlapping observations available at zero lag. Samples are time periods, not trades, traders, or individual price updates.
- Window and interval
- Window is the source period, such as 1d, 7d, or 30d. Interval is the bar size and is currently generally one hour. Calculated at records when the stored result was made.
Relationship kind
- Price–price:
- hourly prediction-market price or log-odds changes.
- Volume–price / price–volume:
- one market’s volume versus the other market’s price changes.
- Volume–volume:
- compares market volume behavior.
- Market price–asset price:
- market price changes versus asset returns.
- Market volume–asset price:
- market volume versus asset returns.
- Asset price–asset price:
- compares returns for two assets.
Relationship scope
Scope explains why a pair was considered, not why it is correlated. Same desk means the markets share an editorial desk; anchor market is a configured cross-desk market; desk asset pairs a market with a tracked asset; asset proxy represents a broader economic theme; same asset type groups matching asset classes; and cross asset pairs different asset types.
Example interpretation
A -22.8% best-lag correlation where the counterpart leads by about 22 hours, with 12.3% adjusted strength, 8.8% quality, and 86 observations can be summarized as: Weak negative relationship. The counterpart leads by approximately 22 hours. Low signal quality based on the relationship strength and sample coverage.