Concepts overview

Beacon separates what an index is from how it is computed from how a portfolio that tracks it behaves. Each concept page below covers one part of that separation:

• Universe — the raw set of identifiers an index draws from, and how it is resolved into Asset objects each rebalance.
• Methodology — the rules layer: Selection (eligibility), Weighting (schemes), and Treatment (corporate-action divisor adjustments).
• Backtest — how BacktestEngine simulates a tracking portfolio against a target weight schedule, and why its NAV is not the same number as the index level.
• Optimiser — deriving weights numerically rather than by a closed-form rule: objectives, constraints, and reading which of them actually bit.
• Risk Model — how assets move together: covariance estimation, shrinkage and why it is on by default, and factor models.
• Attribution — where the return came from and where the risk came from, and why in both cases the parts must add to the whole exactly.

These map onto the three-layer pipeline described on the Home page:

Methodology  ->  Calculator (IndexCalculator.run() -> IndexResult)  ->  Backtest (BacktestEngine.run() -> BacktestResult)

Universe and Methodology together define the Methodology layer; the Calculator layer is IndexCalculator walking business days and applying that methodology; the Backtest layer is BacktestEngine simulating a real portfolio against the resulting weight schedule.