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Plotting Alpha and Beta
MetaStock
Indicator
To plot Alpha and Beta
in MetaStock follow the steps below. **The custom indicator named Beta is
required to plot Alpha.
To plot Alpha
- Create
the custom formulas Alpha and Beta (see below for formula syntax)
- Open
a chart of the desired security
- Drag
the price plot of the index you are comparing, into the chart of the
security and close the chart of the index. **Maximize the security chart
if needed
- Drag
the custom indicator Alpha from the Quick List and drop it onto the price
plot of the index. **The index plot will turn a purplish colour when you
are plotting on top of it.
**Note, this formula
is set to calculate Alpha over 21 periods. To change the time periods replace
each instance of 21 in the formula with the desired number of periods and also
change the time periods in the Beta custom indicator.
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(
Sum( ROC( CLOSE ,1 ,% ) ,21 ) - ( Fml( "Beta" ) * Sum( ROC(
INDICATOR,1,%) ,21 ) ) ) / 21
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To plot Beta
- Open
a chart of the desired security
- Drag
the price plot of the index your comparing, into the chart of the security
- Drag
this custom indicator from the Quick List and drop it onto the price plot
of the index.
Note, this formula is
set to calculate beta over 21 periods. To change the time periods replace each
instance of 21 in the formula with the desired number of periods.
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(
( 21 * Sum( ROC( CLOSE ,1 ,% ) * ROC( INDICATOR ,1 ,% ) ,21 ) ) -
( Sum( ROC( CLOSE ,1 ,% ) ,21) * Sum( ROC( INDICATOR ,1 ,% ) ,21 ) ) ) /
( (21 * Sum( Pwr( ROC( INDICATOR ,1 ,% ) ,2 ) ,21 )) - Pwr( Sum( ROC(
INDICATOR ,1 ,% ) ,21 ) ,2 ))
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**Beta is a measure of
volatility of one security against another. This is typically used to measure
the volatility of a stock against an index like the S&P 500. A value
greater than one indicates the stock is more volatile than the index.
From:
equismetastock@xxxxxxxxxxxxxxx [mailto:equismetastock@xxxxxxxxxxxxxxx] On
Behalf Of Saint Anley
Sent: Tuesday, February 02, 2010 3:43 AM
To: priya_ked@xxxxxxxxx
Cc: equismetastock@xxxxxxxxxxxxxxx
Subject: Re: [EquisMetaStock Group] volatility
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Hi Priya, not sure what you mean by angle of rise and
fall. - besides how do we figure that out on the Metastock platform?
Thanks
Saint
--- On Mon, 2/1/10, priya keds <priya_ked@xxxxxxxxx>
wrote:
From: priya keds <priya_ked@xxxxxxxxx>
Subject: Re: [EquisMetaStock Group] volatility
To: equismetastock@xxxxxxxxxxxxxxx
Date: Monday, February 1, 2010, 7:52 AM
One thing
that i think can measure volatility is the angle of rise and fall.
--- On Mon, 2/1/10, fib1618 <fib1618@xxxxxx net.au>
wrote:
From: fib1618 <fib1618@xxxxxx net.au>
Subject: [EquisMetaStock Group] volatility
To: "Equismetastock" <equismetastock@ yahoogroups. com>
Date: Monday, February 1, 2010, 1:07 PM
one
thing we're interested in as traders is Volatility-- but the question
for me is--- how best to find it?
one can
eyeball charts to find good movers
maybe
we could use a measure for Volatility on a longer setting --
6/100 vol, True Range etc
I've
heard of stocks with a " high Beta " ----
my impression this is a better method but there's nothing
in Metastock help about it other than the indicator.
has
anyone any experience with these methods?
could
someone offer some advice on how best to scan for stocks with higher
volatility please.
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