Trailing

Trailing is a term often attached to a return, ratio or risk measure to describe the time that a particular set of data is referring to. It refers to the most recently completed time period of specified length, such as 3-year or 12-month.

Trailing can also be to describe a past statistic, such as same-store sales, but can also be used to describe a technique, such as a trailing stop order. It is most commonly used as "trailing 3-year,&quot "trailing 12 months," "trailing three months" or "trailing six months."

Often, the trailing 3-year standard deviation will be used as a measure of risk for an investment fund. The trailing 3-year alpha can be used to show how well an investment manager has outperformed their benchmark. Fundamental stock analysis can also often use trailing characteristics in their modeling processes, such as trailing free cash flow, trailing dividend yield, or trailing price-to-earnings (P/E), price-to-sales (P/S), and price-to-book (P/B) ratios. For example, the earnings in a trailing price-to-earnings ratio refers to the past earnings per share over a certain period - usually 12 months. Trailing 12 months is denoted by the acronym "TTM."