Where does CAPE collide?

In meteorology, CAPE stands for convective available potential energy: the vertically integrated buoyancy a parcel of air would gain if lifted from the level of free convection to its equilibrium level, that is, the energy available to accelerate an updraft. Moncrieff and Miller's 1976 The dynamics and simulation of tropical cumulonimbus and squall lines formalised this parcel-energy framework that forecasters now read off a sounding, with higher CAPE signalling the potential for stronger thunderstorms. The referent is an energy per unit mass in the atmosphere, in joules per kilogram, and it has nothing in common with the finance ratio of the same acronym beyond the shared four letters.[1]

Unit

Buoyant energy available to a lifted air parcel (joules per kilogram)

Recovery means

Not applicable

Measured by

Computed by integrating parcel buoyancy between the level of free convection and the equilibrium level on an atmospheric sounding

In financial economics, CAPE is the cyclically adjusted price-to-earnings ratio: a market's price divided not by one year's earnings but by a ten-year, inflation-adjusted average, which smooths the business cycle to gauge whether equities are expensive or cheap over the long run. Campbell and Shiller's 1988 Stock prices, earnings, and expected dividends established the valuation logic of comparing price to smoothed fundamentals, and the measure later became known as the Shiller CAPE. The referent is a dimensionless valuation ratio of a stock index, used to forecast long-horizon returns, and it is an entirely different construct from a thunderstorm's buoyant energy, sharing only the acronym.[2]

Unit

Real price divided by a ten-year average of real earnings (a ratio)

Recovery means

Not applicable

Measured by

Computed by dividing a real (inflation-adjusted) price index by the trailing ten-year average of real earnings