---
title: "Absorption Ratio"
method: POST
path: "/assets/indicators/absorption-ratio"
tags: ["Assets / Indicators"]
---

# Absorption Ratio

`POST /assets/indicators/absorption-ratio`

Compute the absorption ratio associated to a universe of assets.

References
* [Mark Kritzman, Yuanzhen Li, Sebastien Page and Roberto Rigobon, Principal Components as a Measure of Systemic Risk, The Journal of Portfolio Management Summer 2011, 37 (4) 112-126](https://jpm.pm-research.com/content/37/4/112)

## Request body

- object
  - `assets` integer, required — The number of assets
  - `assetsCovarianceMatrix` array[], required — assetsCovarianceMatrix[i][j] is the covariance between the asset i and the asset j
    - number[]
  - `assetsCovarianceMatrixEigenvectors` object
    - `eigenvectorsRetained` integer — The number of eigenvectors to retain in the numerator of the absorption ratio, which must be lower than the number of assets; defaults to [1/5-th] the number of assets

## Response `200`

OK

- object
  - `assetsAbsorptionRatio` number, required — The absorption ratio of the universe of assets

---

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