Rebalanssi

Rebalanssi, or rebalancing, is the process of restoring or maintaining a target balance in a system after disturbances that push it away from that balance. The term is used in Finnish to describe balancing activities across several domains and disciplines.

In finance, portfolio rebalancing aims to maintain a predefined asset allocation by buying or selling assets as their weights drift due to market movements. Methods include calendar-based rebalancing (on a schedule) and threshold-based rebalancing (when allocations drift beyond set limits). Benefits include maintaining a chosen level of risk; costs include transaction fees and tax implications. Practical considerations include tax lot methods and market impact.

In computing and data structures, rebalancing refers to reorganizing data to retain balance properties, most notably in self-balancing binary search trees (such as AVL and red-black trees) where insertions or deletions trigger rotations to keep height balanced, ensuring logarithmic operation times.

In energy and utilities, grid rebalancing involves adjusting generation, storage, and demand to maintain supply-demand balance and system frequency. This may involve demand response, energy storage, and market signals to steer resources where needed.

In distributed systems and networking, load balancing reassigns work among servers to optimize performance and reliability. Approaches include static, dynamic, and consistent-hashing strategies, often combined with auto-scaling.

In logistics and operations, inventory or resource rebalancing redistributes stock or capacity to align with shifting demand patterns. The term encompasses both strategic planning and real-time adjustments.

See also: rebalancing, asset allocation.