Give a set of data, where 3 appears 5 times, 4 appears 3 times, 2 appears 2 times, and 5, 3 and 2 are called weights. This method is called weighting method.
What does the weighted average mean?
Weighted average is to multiply each value by the corresponding weight, then add up to get the total value, and then divide it by the total number of units. The weighted average depends not only on the value (variable value) of each cell in the population, but also on the number of times (frequency) that each value appears. Because the number of occurrences of each value plays a role in weighing its influence in the average, it is called weight. In the application of futures, if the futures price is higher than the weighted average price, the latter is moving up slowly or rapidly, which indicates that the market situation will be easy to rise but difficult to fall or continue to improve. On the contrary, if the futures price is lower than the weighted average price, and the latter is falling slowly or rapidly, it means that the market situation will fall easily, but it is difficult to rise or continue to decline.
What are the weighting methods of stock index?
Stock indexes are weighted by market value, equal rights and dividend yield. Market value weighting is the most popular weighting method, which is divided into total market value weighting and circulating market value weighting. The market value-weighted index holds the most funds. Equal weight means that the proportion of each stock is the same, so its position will be adjusted frequently. Because small-cap stocks also have the same proportion, the accommodation funds of such indexes are limited. The weighting of dividend yield means weighting according to dividend yield. The higher the dividend yield, the higher the weight ratio. The advantage is that the valuation of such indexes is usually low, and the disadvantage is that the funds held by such indexes are usually limited.
What's the difference between arithmetic average and weighted average?
Arithmetic average is classified, while weighted average is the continuous quantization of classified data. Arithmetic average is to add up all the numbers and then divide them. Weighted average is to multiply all the numbers by the weight and then add them up, and finally divide them by the total weight.