Rebalancing band

A rebalancing band defines when drift is large enough to act on. It is set in percentage points (target 50%, band ±5 points) or relative to the target (±20% of 50%, so 40% to 60%). Some policies rebalance on a calendar instead, or combine both.

The band is an instruction, and it may or may not coincide with the allowable range. Where the band is narrower, crossing it means act now, not yet a breach. Where the policy says the range must never be exceeded, the band is the hard limit itself.

In monitoring, a band narrower than the range maps naturally to a warning bound. Example: target 50%, warning bounds at 45% and 55%, hard bounds at 40% and 60%. A 56% weight returns a warning and a 61% weight a breach (allocation ranges).