특정 시장에 대해 시가총액 가중치 지수와 모든 구성 요소의 동일한 지분을 가진 해당 지수의 차트를 비교하여 어떤 중요한 정보를 간편하고 빠르게 얻을 수 있을까요?
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Comparison of charts of a market capitalization-weighted index and a chart of the same index with equal component shares can indicate whether in a specific trend (upward or downward) only selected companies are responsible for its dynamics or if all index components equally contribute to it..
A high concentration of an index does not always imply its weakness.
It is rare for an index to contain the same companies over a long horizon, for example, 30 years. More often than not, in a given business cycle, leaders change, but the whole index remains in an upward trend with occasional corrections. By having exposure to a particular market, whether global or domestic, through an index, we obtain a diversified portfolio of assets from different industries, sectors of the economy, and business entities with diverse business profiles (ideas for achieving success in business).
EXAMPLE:
Comparison of price indexes PLWS (the whole market) and WIG20 for the last 8 years (this data was obtained from stooq.pl) leads to the following conclusions regarding the broad market of Polish stocks, WIG:
1. In 2016, large companies were mainly responsible for the declines and sideways trend in the WIG index.
2. In 2017, large companies grew, while other companies (with a low share in WIG) experienced significant declines, which did not harm the WIG index in achieving substantial growth.
3. The period of 2018-2019 was characterized by a sideways trend in the WIG index, with stagnant results for large companies and significant declines in the small and medium-sized company segment.
4. The period of 2020-2021 saw stronger growth in the indexes of small and medium-sized companies in the initial phase following the COVID-related declines. In late 2020, WIG20 joined the uptrend, which overall influenced the upward trend for the WIG index.
5. The period of 2022-2023 owes both the depth of declines and subsequent strength of growth in the WIG index mainly to large companies from the WIG20 index.
The ability to use charts of appropriate indexes is a very useful analytical tool.
"Comparison of charts of a market capitalization-weighted index and a chart of the same index with equal component shares can indicate whether in a specific trend (upward or downward) only selected companies are responsible for its dynamics or if all index components equally contribute to it..
A high concentration of an index does not always imply its weakness.
It is rare for an index to contain the same companies over a long horizon, for example, 30 years. More often than not, in a given business cycle, leaders change, but the whole index remains in an upward trend with occasional corrections. By having exposure to a particular market, whether global or domestic, through an index, we obtain a diversified portfolio of assets from different industries, sectors of the economy, and business entities with diverse business profiles (ideas for achieving success in business).
EXAMPLE:
Comparison of price indexes PLWS (the whole market) and WIG20 for the last 8 years (this data was obtained from stooq.pl) leads to the following conclusions regarding the broad market of Polish stocks, WIG:
1. In 2016, large companies were mainly responsible for the declines and sideways trend in the WIG index.
2. In 2017, large companies grew, while other companies (with a low share in WIG) experienced significant declines, which did not harm the WIG index in achieving substantial growth.
3. The period of 2018-2019 was characterized by a sideways trend in the WIG index, with stagnant results for large companies and significant declines in the small and medium-sized company segment.
4. The period of 2020-2021 saw stronger growth in the indexes of small and medium-sized companies in the initial phase following the COVID-related declines. In late 2020, WIG20 joined the uptrend, which overall influenced the upward trend for the WIG index.
5. The period of 2022-2023 owes both the depth of declines and subsequent strength of growth in the WIG index mainly to large companies from the WIG20 index.
The ability to use charts of appropriate indexes is a very useful analytical tool.
"Machine translated
Comparing the charts of a market-cap weighted index to a chart of an index with equal weighting for all components can provide significant information regarding the distribution of values of individual components in the index. The market-cap weighted index chart presents the values of individual components based on their market capitalization. This means that larger companies, which have a higher market value, will have a greater impact on the index value. On the other hand, smaller companies, even if they achieve higher percentage growth, may have a smaller influence on the index due to their smaller capitalization. The chart of an index with equal weighting for all components shows the values of all components regardless of their capitalization. This means that even if certain components have a low capitalization, they will still have an equal impact on the index. Comparing these two charts can provide significant information about the influence of individual components on the index value. A market-cap weighted index may reflect higher returns from larger companies that have a greater market share. Conversely, an index with equal weighting for all components may highlight the potential for smaller companies to have a greater impact on the index value. It is worth noting that the choice of the appropriate index depends on the investor's goals and the analysis of a specific market. There is no definitive answer to which index to use, so it is important to familiarize oneself with both the market-cap weighted index chart and the index chart with equal weighting for all components in order to make more informed investment decisions. You can find answers to these and other questions about indexes in our group: Index Investing.
"Comparing the charts of a market-cap weighted index to a chart of an index with equal weighting for all components can provide significant information regarding the distribution of values of individual components in the index. The market-cap weighted index chart presents the values of individual components based on their market capitalization. This means that larger companies, which have a higher market value, will have a greater impact on the index value. On the other hand, smaller companies, even if they achieve higher percentage growth, may have a smaller influence on the index due to their smaller capitalization. The chart of an index with equal weighting for all components shows the values of all components regardless of their capitalization. This means that even if certain components have a low capitalization, they will still have an equal impact on the index. Comparing these two charts can provide significant information about the influence of individual components on the index value. A market-cap weighted index may reflect higher returns from larger companies that have a greater market share. Conversely, an index with equal weighting for all components may highlight the potential for smaller companies to have a greater impact on the index value. It is worth noting that the choice of the appropriate index depends on the investor's goals and the analysis of a specific market. There is no definitive answer to which index to use, so it is important to familiarize oneself with both the market-cap weighted index chart and the index chart with equal weighting for all components in order to make more informed investment decisions. You can find answers to these and other questions about indexes in our group: Index Investing.
"Machine translated