If ITC went up 6.11%, Index goes up 0.18%
We can get into more accurate details if we do using points
If Reliance falls -0.5%, the index falls 0.05%. Now, assumption says, If Reliance rise -0.5% the index should rise 0.05% Will it ?
Here is the fault of the % system as We are not thinking mathematically!
Because when you fall 20%, You need to make back 25% to go back up.
In this document, first go to Page number 16 –
So, Writing again in plain English –
Now, Lets decode the few terms in a layman’s way –
You can see the Base Value from NSE Website. It is an arbitrary figure used as the initial value of an index. (Using such arbitrary figure is quite common practice.)
The IWFs for each company in the index is determined based on the public shareholding of the companies as disclosed in the shareholding pattern submitted to the stock exchanges on a quarterly basis.
So, IWF changes each quarter.
There is a nice illustration showing the proper calculation in the NSE Website that shows us how to calculate IWF properly.
This is a part of the live discussion that happened on Unofficed Discussion Forum. Feel free to participate and engage in future discussions. Here are some agenda to be discussed later –
Let’s discuss this further in the next part of this discussion. Don’t shy away to share your code snippets or variations in the forum if You trying something
[…] You can see it provides with the data of IWF i.e. Investable Weight Factor too which was discussed in the last article. […]