Valuation dispersion map

The valuation dispersion map quantifies the spread of valuation multiples across the index rather than the level. The level matters too — and lives in the regime scorecard — but the spread tells a different story. Compressed dispersion (tight 10-90 percentile spread on forward P/E) indicates the market is pricing a uniform outcome and is often a marker of late-cycle complacency. Wide dispersion indicates investors are differentiating sharply between winners and losers, which historically maps to early-cycle and mid-cycle regimes. The map plots valuation against quality (return on invested capital) and against growth (3-year forward earnings growth) so the reader can distinguish multiple expansion driven by quality / growth from pure rerating. The model emits three artifacts: the dispersion percentile, the location of the largest constituents on the valuation × quality plane, and a flag when valuation has decoupled from quality (i.e. the cohort with the highest multiples is no longer the cohort with the highest ROIC). The decoupling flag is the single most important output and is almost always accompanied by a downgrade of the regime composite.