Relevant Index

last updated 06/17/2014

Almost all  stocks and funds are assigned a relevant index by FastTrack. The relevant index is the market index (or a index fund) that most closely correlates to each  issue's price movement and volatility.

How to Use

Right-Click the ColorBar. When Relevant Index is checked, then changing the red ColorBar cell ticker will also revise the green ColorBar cell ticker.

WARNING; If you forget that you have check marked Relevant Index, then you will get upset and confused by the unexpected changes in the green line.

Relevant index is also selectable as the Basis for Risk return

Where Used

The spreadsheet has a Relevant Index (RelIndex) column. The top six issues are are well correlated to EFV-X. This means an investor seeking diversification would not invest in more than one or two of these issues at the same time.

The column is not dependent on the setting of the Relevant Index" on the ColorBar or in the Low Risk Basis

Relevant Sharpe Index

A column in the spreadsheet:
When the low risk basis is set to Relevant Index, then Sharpe is computed for the period for the issue and it's relevant Index.

Relevant Standard Deviation

A column in the Spreadsheet: The RelSD is the ratio of the issue's Standard Deviation (volatility measurement) to the DD of the relevant index. When RelSD is greater than 1.0 then the issue is more volatile than its Relevant Index.

 See the math help.