---
title: "Rebalance"
description: "How rebalancing resets a strategy's holdings to their target weights: pick a cadence of 1, 3, 6, 12, 18 or 24 months and drift is corrected at each date."
canonical_url: "https://fincanva.com/docs/backtesting/rebalance"
last_updated: "2026-07-24"
md_url: "https://fincanva.com/docs/backtesting/rebalance.md"
---

# Rebalance

Rebalancing is periodically resetting a strategy's holdings back to their target weights on a fixed cadence, so drift from market moves is corrected at each scheduled date rather than left to compound. Between rebalances the weights drift as some holdings rise and others fall; at each rebalance date the strategy trims what has grown past its target and tops up what has fallen below, returning the mix to plan. You choose how often this happens with **Rebalance every**, in months.

**Also seen as:** rebalancing, periodic reweighting

Fincanva previously called this a *rotation*; that term is retired — the app now only says Rebalance.

## Defaults in Fincanva

- **Rebalance every** is a whole number of months, chosen from **1, 3, 6, 12, 18, or 24**; the default is every month.
- The rebalance interval is the master clock: other timing settings — like how long a position may be held, or how long to wait before reinvesting freed-up cash — are counted in whole multiples of it (`Must be a multiple of {rebalanceEvery} months`), so changing the cadence re-snaps them.
- The **Next rebalance** date is shown for each live strategy, in your browser's [time zone](/docs/backtesting/time-zone); [risk conditions](/docs/strategies/risk-condition) can trigger an extra, off-schedule rebalance when a strategy switches to its Risk-Off allocation.

## Worked example

A strategy targets 60% in a stock ETP and 40% in a bond ETP, rebalancing every month. Over the four weeks after a rebalance the stock sleeve rallies and the bond sleeve is flat, so the split drifts to roughly 63/37 — the portfolio is now carrying more equity risk than intended. On the next monthly rebalance date the strategy sells enough of the stock sleeve and buys enough of the bond sleeve to snap the mix back to 60/40, and the drift-and-correct cycle begins again. Choose a longer cadence — every 6 months — and the weights are allowed to drift much further before they are reset. See [rebalance frequency](/docs/strategies/how-often-your-strategy-rebalances) for how to pick a cadence.