Do high-conviction picks actually outperform? Performance analysis of hedge fund positions grouped by conviction score band — testing whether our scoring system predicts returns.
Each bar represents a conviction score range (0-20, 20-40, etc.). If the scoring system works, higher conviction bands should show better average P&L and win rates.
How to read: Compare the Avg P&L % and Win Rate across bands. An upward trend from left to right validates the conviction scoring model. Sample size matters — small samples are less reliable.
Data sourced from SEC EDGAR 13F filings. Not financial advice. Full disclaimer