Relevant Index

last updated 02/26/2008

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 funds at the same time.

The column is not dependent on the setting of the Relevant Index" on the ColorBar.

Relevant Standard Deviation

The RelSD is the ratio of the funds Standard Deviation (volatility measurement) to the DD of the relevant index. When RelSD is greater than 1.0 then the funds is more volatile than its Relevant Index.

 See the math help.