There are three ways to calculate the stock index :
- Relative method
The relative method, also known as the average method, is to first calculate the stock index of each sample, and then add up to obtain the total arithmetic mean. Its calculation formula is: stock index=sum of n sample stock indices/n.
2. the comprehensive method
The comprehensive method is to first add up the prices of the sample stocks in the base period and the reporting period respectively, and then compare them to obtain the stock index. Namely: stock index = sum of stock prices in the reporting period/sum of stock prices in the base period.
From the calculation of the stock index by the average method and the comprehensive method, both of them do not take into account factors such as the difference in the issuance and trading volume of various sampled stocks, and the different influences on the stock price of the entire stock market. Therefore, the calculated index is not accurate enough. In order to make the stock index calculation accurate, it is necessary to add weights, which can be trading volume or issuance.
3. the weighting method
The weighted stock index is weighted according to the relative importance of the sample stocks in each period. The weight can be the number of shares traded, the number of shares issued, etc. Divided by time, the weights can be base options or report options. An index with the number of traded shares (or issuance) as the weight in the base period is called the Rasbaer index; The Rasbaer index focuses on the number of shares traded (or issuance) during the base period, while the Pasch index focuses on the number of shares traded (or issued) during the reporting period. Most stock indices in the world today are Pasch indexes.