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Introduction
Value or capitalization weighted
As you surely know it, there are many way to calculate an index. Around the world, me mostly use the “capitalization-weighted” method which mean that bigger company have a bigger impact on index evolution (Nasdaq 100, S&P 500, CAC 40, DAX 30, FTES 100, SMI…).
Formula: Σcapitalization/divisor
Advantage: reflect economic activity
Disadvantage: biggest cap. could be overweighting the others (on SMI, Nestlé, Novartis, UBS, Roche and Crédit Suisse are weighting 75%. The other 22 companies share the remaining quarter).
Price weighted
The major benchmark index of the world, the Dow Jones Industrial Average (DJIA) is still computed with its original method: it is a price weighted index. It means that big company do not weight more than smaller because of a higher capitalization. The most expensive share has the biggest influence on the indice.
Formula: Σstock prices/divisor
Originally, biggest cap also were the most expensive share but it is nor more so. General Electrics, world biggest cap (2005.03.30, 383 bil.) weight 3.5 times less that United Technology, Dow most expensive share (cap: 52.5 bil.)
Advantage: easier to compute
Disadvantage: smaller cap are leading the index (there are fex big cap). It doesn’t capture total economic activity.
What will be done?
On this blog, I will use both method to compute Dow Jones Industrial Average and see if it changes much. Using the two methods and comparing their evolution can give better analysis (official method measure most expensive shares activity, cap. method observe biggest companies evolution). I started my two calculation on Monday, March 28, 2005.
| . | Price Weighted | Cap. Weighted | Pri. Perf | Cap. Perf | Pri. Change | Cap. Change | Pri. Stard to date | Cap. Start to date |
| START | 10485.65 | 10485.65 |
|
|
|
| 0 | 0 |
| 28.03.05 | 10485.65 | 10485.65 | 0.00% | 0.00% | 0.00 | 0.00 | 0.00% | 0.00% |
| 29.03.05 | 10405.70 | 10420.64 | -0.76% | -0.62% | -79.95 | -65.01 | -0.76% | -0.62% |
| 30.03.05 | 10540.93 | 10552.01 | 1.30% | 1.26% | 135.23 | 131.37 | 0.53% | 0.63% |
| 31.03.05 | 10503.76 | 10514.62 | -0.35% | -0.35% | -37.17 | -37.39 | 0.17% | 0.28% |
| 01.04.05 | 10404.30 | 10421.70 | -0.95% | -0.88% | -99.46 | -92.92 | -0.78% | -0.61% |
| 04.04.05 | 10421.14 | 10452.07 | 0.16% | 0.29% | 16.84 | 30.37 | -0.62% | -0.32% |
| 05.04.05 | 10458.46 | 10514.73 | 0.36% | 0.60% | 37.32 | 62.66 | -0.26% | 0.28% |
| 06.04.05 | 10486.02 | 10533.86 | 0.26% | 0.18% | 27.56 | 19.13 | 0.00% | 0.46% |
| 07.04.05 | 10546.32 | 10585.09 | 0.58% | 0.49% | 60.30 | 51.23 | 0.58% | 0.95% |
| 08.04.05 | 10461.34 | 10508.51 | -0.81% | -0.72% | -84.98 | -76.58 | -0.23% | 0.22% |
| 11.04.05 | 10448.56 | 10506.42 | -0.12% | -0.02% | -12.78 | -2.09 | -0.35% | 0.20% |
| 12.04.05 | 10507.97 | 10584.40 | 0.57% | 0.74% | 59.41 | 77.98 | 0.21% | 0.94% |
| 13.04.05 | 10403.93 | 10492.25 | -0.99% | -0.87% | -104.04 | -92.15 | -0.78% | 0.06% |
| 14.04.05 | 10278.75 | 10419.04 | -1.20% | -0.70% | -125.18 | -73.21 | -1.97% | -0.64% |
| 15.04.05 | 10087.51 | 10272.79 | -1.86% | -1.40% | -191.24 | -146.25 | -3.80% | -2.03% |
| 18.04.05 | 10071.25 | 10298.14 | -0.16% | 0.25% | -16.26 | 25.35 | -3.95% | -1.79% |
| 19.04.05 | 10127.41 | 10346.49 | 0.56% | 0.47% | 56.16 | 48.35 | -3.42% | -1.33% |
| 20.04.05 | 10012.36 | 10197.84 | -1.14% | -1.44% | -115.05 | -148.65 | -4.51% | -2.74% |
| 21.04.05 | 10218.60 | 10407.17 | 2.06% | 2.05% | 206.24 | 209.33 | -2.55% | -0.75% |
| 22.04.05 | 10157.71 | 10349.80 | -0.60% | -0.55% | -60.89 | -57.37 | -3.13% | -1.30% |
| 25.04.05 | 10242.47 | 10424.23 | 0.83% | 0.72% | 84.76 | 74.43 | -2.32% | -0.59% |
| 26.04.05 | 10151.13 | 10343.89 | -0.89% | -0.77% | -91.34 | -80.34 | -3.19% | -1.35% |
| 27.04.05 | 10198.80 | 10388.39 | 0.47% | 0.43% | 47.67 | 44.50 | -2.74% | -0.93% |
| 28.04.05 | 10070.37 | 10241.12 | -1.26% | -1.42% | -128.43 | -147.27 | -3.96% | -2.33% |
| 29.04.05 | 10192.51 | 10380.64 | 1.21% | 1.36% | 122.14 | 139.52 | -2.80% | -1.00% |
| 02.05.05 | 10251.70 | 10438.99 | 0.58% | 0.56% | 59.19 | 58.35 | -2.23% | -0.44% |
| 03.05.05 | 10256.95 | 10439.68 | 0.05% | 0.01% | 5.25 | 0.69 | -2.18% | -0.44% |
| 04.05.05 | 10384.64 | 10518.63 | 1.24% | 0.76% | 127.69 | 78.95 | -0.96% | 0.31% |
| 05.05.05 | 10340.38 | 10492.33 | -0.43% | -0.25% | -44.26 | -26.30 | -1.39% | 0.06% |
| 06.05.05 | 10345.40 | 10486.43 | 0.05% | -0.06% | 5.02 | -5.90 | -1.34% | 0.01% |
| 09.05.05 | 10384.34 | 10553.82 | 0.38% | 0.64% | 38.94 | 67.39 | -0.97% | 0.65% |
| 10.05.05 | 10281.11 | 10423.87 | -0.99% | -1.23% | -103.23 | -129.95 | -1.95% | -0.59% |
| 11.05.05 | 10300.25 | 10443.06 | 0.19% | 0.18% | 19.14 | 19.19 | -1.77% | -0.41% |
| 12.05.05 | 10189.48 | 10339.00 | -1.08% | -1.00% | -110.77 | -104.06 | -2.82% | -1.40% |
| 13.05.05 | 10140.12 | 10296.44 | -0.48% | -0.41% | -49.36 | -42.56 | -3.30% | -1.80% |
| 16.05.05 | 10252.29 | 10395.65 | 1.11% | 0.96% | 112.17 | 99.21 | -2.23% | -0.86% |
| 17.05.05 | 10331.88 | 10459.96 | 0.78% | 0.62% | 79.59 | 64.31 | -1.47% | -0.25% |
| 18.05.05 | 10464.45 | 10566.11 | 1.28% | 1.01% | 132.57 | 106.15 | -0.20% | 0.77% |
| 19.05.05 | 10493.19 | 10615.97 | 0.27% | 0.47% | 28.74 | 49.86 | 0.07% | 1.24% |
| 20.05.05 | 10471.91 | 10589.52 | -0.20% | -0.25% | -21.28 | -26.45 | -0.13% | 0.99% |
| 23.05.05 | 10523.56 | 10634.45 | 0.49% | 0.42% | 51.65 | 44.93 | 0.36% | 1.42% |
| 24.05.05 | 10503.68 | 10634.31 | -0.19% | 0.00% | -19.88 | -0.14 | 0.17% | 1.42% |
| 25.05.05 | 10457.80 | 10612.66 | -0.44% | -0.20% | -45.88 | -21.65 | -0.27% | 1.21% |
| 26.05.05 | 10537.60 | 10675.91 | 0.76% | 0.60% | 79.80 | 63.25 | 0.50% | 1.81% |
| 27.05.05 | 10542.55 | 10680.59 | 0.05% | 0.04% | 4.95 | 4.68 | 0.54% | 1.86% |
| 30.05.05 | 10542.55 | 10680.59 | 0.00% | 0.00% | 0.00 | 0.00 | 0.54% | 1.86% |
| 31.05.05 | 10467.48 | 10587.07 | -0.71% | -0.88% | -75.07 | -93.52 | -0.17% | 0.97% |
| 01.06.05 | 10549.87 | 10681.02 | 0.79% | 0.89% | 82.39 | 93.95 | 0.61% | 1.86% |
| 02.06.05 | 10553.49 | 10692.28 | 0.03% | 0.11% | 3.62 | 11.26 | 0.65% | 1.97% |
| 03.06.05 | 10460.97 | 10628.68 | -0.88% | -0.59% | -92.52 | -63.60 | -0.24% | 1.36% |
| 06.06.05 | 10467.03 | 10673.73 | 0.06% | 0.42% | 6.06 | 45.05 | -0.18% | 1.79% |
| 07.06.05 | 10483.07 | 10618.20 | 0.15% | -0.52% | 16.04 | -55.53 | -0.02% | 1.26% |
| 08.06.05 | 10476.86 | 10617.20 | -0.06% | -0.01% | -6.21 | -1.00 | -0.08% | 1.25% |
| 09.06.05 | 10503.02 | 10640.09 | 0.25% | 0.22% | 26.16 | 22.89 | 0.17% | 1.47% |
| 10.06.05 | 10612.63 | 10692.52 | 1.04% | 0.49% | 109.61 | 52.43 | 1.21% | 1.97% |
| 13.06.05 | 10522.56 | 10636.90 | -0.85% | -0.52% | -90.07 | -55.62 | 0.35% | 1.44% |
| 14.06.05 | 10547.57 | 10657.66 | 0.24% | 0.20% | 25.01 | 20.76 | 0.59% | 1.64% |
| 15.06.05 | 10566.37 | 10673.60 | 0.18% | 0.15% | 18.80 | 15.94 | 0.77% | 1.79% |
| 16.06.05 | 10578.65 | 10683.12 | 0.12% | 0.09% | 12.28 | 9.52 | 0.89% | 1.88% |
| 17.06.05 | 10623.07 | 10724.62 | 0.42% | 0.39% | 44.42 | 41.50 | 1.31% | 2.28% |
| 20.06.05 | 10609.11 | 10706.17 | -0.13% | -0.17% | -13.96 | -18.45 | 1.18% | 2.10% |
| 21.06.05 | 10599.67 | 10678.23 | -0.09% | -0.26% | -9.44 | -27.94 | 1.09% | 1.84% |
| 22.06.05 | 10587.93 | 10669.44 | -0.11% | -0.08% | -11.74 | -8.79 | 0.98% | 1.75% |
| 23.06.05 | 10421.44 | 10533.20 | -1.57% | -1.28% | -166.49 | -136.24 | -0.61% | 0.45% |
| 24.06.05 | 10297.84 | 10422.80 | -1.19% | -1.05% | -123.60 | -110.40 | -1.79% | -0.60% |
| 27.06.05 | 10290.78 | 10421.26 | -0.07% | -0.01% | -7.06 | -1.54 | -1.86% | -0.61% |
| 28.06.05 | 10405.63 | 10509.39 | 1.12% | 0.85% | 114.85 | 88.13 | -0.76% | 0.23% |
| 29.06.05 | 10374.48 | 10495.39 | -0.30% | -0.13% | -31.15 | -14.00 | -1.06% | 0.09% |
| 30.06.05 | 10274.97 | 10399.41 | -0.96% | -0.91% | -99.51 | -95.98 | -2.01% | -0.82% |
| 01.07.05 | 10303.44 | 10411.19 | 0.28% | 0.11% | 28.47 | 11.78 | -1.74% | -0.71% |
| 04.07.05 | 10303.44 | 10411.19 | 0.00% | 0.00% | 0.00 | 0.00 | -1.74% | -0.71% |
| 05.07.05 | 10371.80 | 10505.40 | 0.66% | 0.90% | 68.36 | 94.21 | -1.09% | 0.19% |
| 06.07.05 | 10270.68 | 10402.09 | -0.97% | -0.98% | -101.12 | -103.31 | -2.05% | -0.80% |
| 07.07.05 | 10302.29 | 10406.74 | 0.31% | 0.04% | 31.61 | 4.65 | -1.75% | -0.75% |
| 08.07.05 | 10449.14 | 10545.52 | 1.43% | 1.33% | 146.85 | 138.78 | -0.35% | 0.57% |
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Graphs
Chart:
Movers (since start):
