Makeup of the dow jones
How is it decided, which stocks go into dow jones and which ones are dropped? How does this work for price-weighed indexes in general?
How is it decided, which stocks go into dow jones and which ones are dropped? How does this work for price-weighed indexes in general?
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Don't worry about it. The DJIA is more flawed than other indices b/c it is price-weighted.
theres more than a 90% correlation with the s&p. its fine to use if your not actively trading.
yeah I agree. The DJIA is flawed I think for most uses, but it does serve a purpose.
The components are decided by the editors of the WSJ; their choices are totally discretionary, though they follow some guidelines.
A better "correlation" estimate vs SPX is 0.98.
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