Creating An Index

[carltonp 10]

Hello traders,

 

Can someone please tell me how does one go about creating an index?

 

For example, if I followed 10 of my favourite stocks, how would I go about creating an index of those stocks?

 

Cheers

 

Carlton

[iwshares 10]

I wouldn't want to call it an academically suitable site, but here is a starter:

 

Stock market index - Wikipedia, the free encyclopedia

[SIUYA 11]

there are many different ways - do you want them to be volume weighted, weighted by market capitalization, equal weighted, weighted as per you initial portfolio weightings????

 

how often do you change the index and put new instruments into it.

 

The simplest index of the stocks you are looking at is an equal weighted index from a common base...get excel and muck around

[Tradewinds 12]

Hello traders,

 

Can someone please tell me how does one go about creating an index?

 

For example, if I followed 10 of my favourite stocks, how would I go about creating an index of those stocks?

 

Cheers

 

Carlton

 

What is the objective? Do you want to know overall profit or loss? Do you want to test for correlations? Will it be part of your trading strategy? What trading platform are you using? You'll probably need to either program a study that accesses the data for each stock, then does the math, and plots the output. Or there may be some charting platforms that allow simple addition of ticker symbols in the symbol field.