Insider Activity Concentration

Insider Activity Concentration captures whether insider trades originate from dispersed participants (low concentration, diffuse signal) or from a tight cohort of decision makers (high concentration, cohesive signal). High concentration among multiple insiders at the same firm, executing similar positions within a narrow window, typically indicates institutional confidence or coordinated capital allocation. The metric is computed as the Herfindahl index or entropy measure across filer identity, transaction type, direction, and temporal clustering, normalized to a 0-1 scale where 1 represents maximum concentration.

A high concentration score acts as a conviction multiplier: several board members or executives buying in the same direction over a short window is a stronger signal than the same total dollar amount from a single filer. Scattered, one-off activity more often reflects individual liquidity needs than a shared view. Reading concentration alongside trade size as a percent of float helps separate a coordinated move from background noise.