ShmoopTube

Where Monty Python meets your 10th grade teacher.

Search Thousands of Shmoop Videos


Finance Videos 17 videos

Finance: What is Common Stock?
379 Views

What is common stock? Ownership. Common shareholders own a pro rata slice of the pie. They elect the board of directors by vote. Some companies hav...

Finance: What is Efficient Markets Theory?
141 Views

What is the Efficient Markets Theory? The Efficient Markets Theory says that stocks trade at their fair value all of the time, assuming all informa...

Finance: What is Amortization?
49 Views

What is amortization? Amortization tracks the decline in value of a contract or service, usually paid for in advance. You received $10,000 in advan...

See All

Finance: What is Characteristic Line? 39 Views


Share It!


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.

Language:
English Language

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

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

Related Videos

GED Social Studies 1.1 Civics and Government
39794 Views

GED Social Studies 1.1 Civics and Government

Fake News
11938 Views

How do you tell fake news from real news?

Finance: What is Bankruptcy?
260 Views

What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...

Finance: What is a Dividend?
1777 Views

What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...

Finance: How Are Risks and Rewards Related?
589 Views

How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...