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RE: [amibroker] Re: Creating Indexes with AddToComposite



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Reef,

 

That’s an interesting approach.    When you say, “…then averaged to yield the % change…”.   Is this an MA of the summed values?  Or is this something else?

 

FYI, I’m experimenting with an AD index, a simple summation index, a custom Money Flow index (like CMF but using True Range and computed for markets, sectors and industries), and a new highs/lows index.   So far, the summation index and DMF has shown the best signals, but I’m still testing.

 

I’d like to experiment with your index.   I’ll be happy to share my code.

 

Regards,

 

Dan.

 


From: amibroker@xxxxxxxxxxxxxxx [mailto:amibroker@xxxxxxxxxxxxxxx] On Behalf Of Ed Hoopes
Sent: Tuesday, September 06, 2005 12:07 PM
To: amibroker@xxxxxxxxxxxxxxx
Subject: [amibroker] Re: Creating Indexes with AddToComposite

 

There is an additional type of index that I use.  When I trade, I buy
a portfolio of stocks, and invest a equal dollar amount in each stock.

To track this type of portfolio, it is useful to create an index in
which the daily PERCENT change for each stock is calculated, then
summed, then averaged to yield the % change for the portfolio. 

I realize that if you already own the stocks, you can do the same with
your portfolio value.  But I find this valuable when exploring
historical data, new groups of stocks or wanting to look at a subset
of the positions I currently have.

Reef-Break


--- In amibroker@xxxxxxxxxxxxxxx, "Dan Clark" <dan_public@xxxx> wrote:
> Tomasz,
>

>
> Thanks for the great feedback.   Two questions, though.
>

>
> 1.       I agree that the High and Low of the day can occur at any
time, but
> for EOD purposes, why would High-Low values be any different than
Open-Close
> values?
>

>
> 2.       Regarding unweighted indexes vs. weighted indexes (including
> cap-weighted), do you have any links or references that I can use to
> research:
>

>
> *      What are the benefits of weighted versus unweighted indexes?
> When/why would you use one versus the other?  
> *      How is the "weighting" of weighted indexes typically calculated?
> For example, is it done by simply multiplying the price time the
number of
> shares outstanding?  
>

>
> Thanks and best regards,
>

>
> Dan.
>

>

>
>   _____ 
>
> From: amibroker@xxxxxxxxxxxxxxx [mailto:amibroker@xxxxxxxxxxxxxxx]
On Behalf
> Of Tomasz Janeczko
> Sent: Tuesday, September 06, 2005 3:04 AM
> To: amibroker@xxxxxxxxxxxxxxx
> Subject: Re: [amibroker] Creating Indexes with AddToComposite
>

>
> Hello,
>

>
> Simply adding prices generates "unweighted" index. It is valid
technique.
> Dow Jones Industrials is most
>
> popular example of such index.
>

>
> Usual approach is to do capitalization-weighting. For this you need
to know
> the number of shares issued.
>
> Such information is available from Quotes Plus. SP 500 is example of
> capitalization-weighted index.
>

>
> As for composite high and low there is another issue to consider:
>
> It is not possible to re-create "real-time" High-Low values of composite
> index using EOD data for
>
> simple fact that Highs and Lows on index components occur at
DIFFERENT times
> during the day.
>
> Simple sum gives just the result that is equivalent to the situation
when
> High and Low is hit
>
> on ALL components at the same time. (very very rare).
>
> Unfortunatelly without intraday data you have simply no other option.
>

>
> Composite Open and Close are of course correct because open and
close prices
> occur
>
> at the same time on all components (market open/close times)
>
>
> Best regards,
> Tomasz Janeczko
> amibroker.com
>
> ----- Original Message -----
>
> From: Dan Clark <mailto:dan_public@xxxx> 
>
> To: amibroker@xxxxxxxxxxxxxxx
>
> Sent: Tuesday, September 06, 2005 5:19 AM
>
> Subject: [amibroker] Creating Indexes with AddToComposite
>

>
> Hi,
>

>
> I'm creating custom indices using AddToComposite.    IMO, this is
one of the
> best features of AB and, after a few some initial rough spots (all my
> fault), I have NO technical problems creating a composite index.
> However...
>

>
> When creating an index which is simple composite of the US Common
Stocks, I
> notice that the daily range is almost exactly the same and price
movements
> are relatively muted when compared to the standard S&P 500 index.  For
> reference, below is the composite index data created from stocks
with Close
> > $ and volume > 100,000 shares.   As you can see, the daily range
rarely
> goes below 130 points or over 165 points. 
>

>
> What is the best algorithm for creating an index?   Is a simple
summation
> the best way?  Is it valid to simply add together the OHLCV of $3
stocks and
> $100 stocks?   Would it better to somehow normalize the stock
prices?  If
> so, how?
>

>
> I'd appreciate any ideas you might have.
>

>
> Thanks and regards,
>

>
> Dan.
>

>

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