What Is a Microcap Index?

Constituent stocks, also known as "index stocks." The value obtained by averaging and dynamically comparing the stock prices issued by some representative companies on the stock market is called a stock price index. The stock selected for the calculation of the stock price index.

Constituent stocks

Select a certain number of representative listed company stocks as

1. based on

According to the number of stock samples included in the index calculation range when compiling the stock price index, the stock price index can be divided into all listed stock price indexes (that is, the composite index) and constituent stock indexes.

Constituent stocks

Constituent index refers to the selection of some representative stocks from all the stocks covered by the index as an index sample, which is called the index's constituent stocks. Only the selected constituent stocks are included in the index calculation range during calculation.

For example, the Shenzhen Stock Exchange Component Index is a comprehensive component index calculated by selecting 40 types from all the listed stocks on the Shenzhen Stock Exchange. Through this index, the price trend of all listed stocks can be approximated. The SSE 180 Index of the Shanghai Stock Exchange is the SSE Component Index of the Shanghai Stock Exchange. There are two methods for calculating the stock price index: arithmetic average method and weighted average method.

1. The arithmetic average method is a simple average of the prices of each stock that composes the index to calculate an average value. For example, if the calculated stock index includes 3 stocks whose prices are respectively 15 yuan, 20 yuan, and 30 yuan, the arithmetic average value of the stock price is (152030) /3=21.66 yuan.

2, the weighted average method is in the calculation of the average share price, taking into account not only the price of each stock, but also on the size of the affected market, to be adjusted according to the average value of each stock. In practice, generally based on the volume or the number of issued shares as a reference market impact factors included in the index calculation, called weights. For example, the number of shares issued in the above example is 100 million shares, 200 million shares, and 300 million shares, respectively.

Morgan Stanley

Operator, the weighted average of prices of (15 × l + 20 × 2 + 30 × 3) / (l + 2 + 3) = 24.16 dollars. As the actual average price of stocks as an index is not convenient for people to calculate and use, it is rarely used to directly express the average index level. Instead, the average price of a certain base date is used as the benchmark, and the average price of each period in the future the average price compared to the ratio calculated for each period, and then converted to one hundred or one thousand score value, as a value of the stock price index. For example, the Shanghai Composite Stock Exchange and Shenzhen Stock Exchange issued a composite index base date index of 100 points, while the two component index base date indices released were both 1,000 points.

In practice, listed companies often have the capital increase and stock split, dividend and other acts, the stock price to produce ex-dividend effect, loss of continuity can not be directly compared. Therefore, when calculating the stock price index, we must also consider the changes of these factors, and correct the index in time to avoid distortion of the stock price index.