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Finance: What is Characteristic Line? 39 Views
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Description:
What is Characteristic Line? Technical analysts’ stock in trade are their charts, which crunch the numerical data from past trading dates to assess the market’s sentiment towards a particular tradeable asset. The characteristic line is the measurement of the asset’s historical excess return relative to return under zero risk conditions.
- Social Studies / Finance
- Finance / Financial Responsibility
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Career Categories / Finance
- Finance and Economics / Terms and Concepts
Transcript
- 00:00
Finance allah shmoop what is characteristic line thie characteristic line
- 00:08
is a quote fitted unquote line through a bunch of
- 00:12
data points that reflects the character of the data itself
- 00:16
Like all these dots here they actually have a character
- 00:19
like pathos and humanity and you see it getting feel
Full Transcript
- 00:22
it never mind well these things are points relating the
- 00:25
returns from coca cola stock versus the s and p
- 00:29
five hundred over some period of time Well that highly
- 00:32
similarly fitted line shows that the performance of k o
- 00:37
it's the ticker for coke if you live on mars
- 00:40
is very closely related to the performance of the overall
- 00:43
market when the market goes up While generally speaking ko
- 00:47
goes up as well had the line slope the opposite
- 00:51
direction because the data looked like this than ko would
- 00:55
be A negatively correlated line with the performance of the
- 00:58
market in its characteristic would be the opposite direction Well
- 01:02
the key idea is that lines through bunches of data
- 01:05
points Those things give character or at least a characteristic
- 01:09
explaining the direction of a given trend whether it's a
- 01:12
stock price the popularity of a new children's toy or
- 01:16
the ebola infection rate way less fun than that children's
- 01:21
toy thing Yeah line basically is a summary of all
- 01:24
the dots That's what it is Well reading the tea
- 01:27
leaves of these graphs is a big part of what
- 01:29
chartist style invest or traders All do So if you
- 01:33
like dots and plots and lines and did a whole
- 01:37
lot of light bright when you were a kid well
- 01:39
then maybe this one's for you And if you've got
- 01:41
some experience in the mortuary business well you might be
- 01:44
able to come up with some kind of crossover gig 00:01:49.619 --> [endTime] Ooh
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