BacktestFolio · Glossary
Quartile
In plain language
Quartiles help read the Monte Carlo cone: the 25th percentile (Q1) is the 'prudent' scenario — 75% of outcomes end better than this. The 75th percentile (Q3) is the 'favourable' scenario — only 25% end better. Between Q1 and Q3 lies the central half of all scenarios.
Technical definition
Division of the simulated scenario distribution into four equal parts (25% each): Q1 is the 25th percentile, Q2 the 50th (median), Q3 the 75th. In BacktestFolio's Monte Carlo projection cone, the 'Prudent' and 'Favourable' bands correspond to the 1st and 3rd quartile respectively.