Disparity Index
Categories: Financial Theory, Econ, Metrics
If you didn’t already know, a “disparity” is kind of just a fancy way for saying “the difference between point A and point B.” A disparity index is a technical indicator for an asset, where point A is its last closing price and point B is some predetermined moving average.
The disparity index is the difference expressed as a percentage. A positive percentage means that the asset is gaining upward momentum, while a negative percentage means the asset is taking a nosedive.
Investors use indexes like the disparity index to try to get an early glimpse into an asset’s change in trend so that they can make decisions accordingly, and make some money buying or selling the assets they’re watching. If you’re this kind of investor, you no doubt sleep with one eye open...and one eye on the disparity index. Like a dolphin. It’s fine.
Related or Semi-related Video
Finance: What are Limit Order, Sell Limi...7 Views
Finance a la shmoop what is a limit order? you want to sell a thousand shares
of Colonel electric it was demoted after they cut their dividend the shares have [Scissors cuts dividend in half]
been trading wildly between $15 and $25 a share you don't want to feel like a
moron for having sold them at fifteen bucks when six weeks later they kissed
25 with tongue so what do you do well you put in a limit order that is you put
a limit of a minimum price of 25 bucks a share for Colonel Electric such that [Pile of stocks appear]
those shares will simply sit in your account unsold maybe forever until
somebody out in the wild blue yonder of Stockland is willing to pay twenty five [Woman standing at a colonel electric stand]
dollars or more for the shares where you have a minimum price limit of 25 bucks a
share in your order so here's to hoping they sell and don't get further demoted [Man carries stock into car]
Sargent Electric is just a place you don't want to go