Corporate A/G Research Extension SEC public-company structural distress study

Document · Calibration Policy

Calibration / Monitoring-Band Policy

A research-grade quantile-band monitoring policy for the structural-distress score. Predeclared cuts; no F1 tuning; designed for triage, not automated decisions.

Summary

The Phase-19 calibration policy defines five monitoring bands by fixed quantile cuts on the test-fold structural-distress score distribution. The bands are operator-facing triage primitives, not automated decisions. The Watch band (80–95th percentile) is the most informative tier; the top-1% Critical band shows a tail dropoff and is noise-prone.

The five predeclared bands

BandPercentilen in bandPos in bandEvent rateLiftRecall captured
Normal / background0–6011,646490.42%0.3521%
Elevated60–803,882761.96%1.6533%
Watch80–952,911903.09%2.6039%
High structural concern95–99745152.01%1.696.5%
Critical / inspect manually99–10022610.44%0.370.4%

Headline reads

Tail-dropoff notice

The Critical / top-1 % band does not have the highest event rate. Its lift is below 1.0 (worse than random for that slice). This is consistent with the Phase-18 pooled top-1% lift of 0.43×, and is honestly flagged here. Operators should treat the top 1% as noise-prone, not as the highest-priority flag. The Watch band is the actionable tier; the Critical band is for human review of extreme outliers (some of which are real distress, some of which are data-quality outliers).

Why these bands and not F1-tuned cutoffs

What this is and is not

These bands are research-grade triage primitives. They are not automated decisions, not deployment thresholds, and not calibrated probabilities. Each company appearing in any band requires manual inspection. Lift 2.6× on a 1% base rate means roughly 3% precision in the Watch band — useful for triage, not for action.

Source basis: public summary of CORPORATE_PHASE19_CALIBRATION_POLICY.md and processed/phase19_threshold_policy_table.csv in the project repository.

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