The Dual Role of the Correction Coefficient in the Formula for Calculating the Dow Jones

Abstract

In this article, the formula for calculating the Dow Jones is considered from the point of view of influence on its value in this formula the correction factor, usually called «divisor of the Dow Jones» (Dow Divisor) and changing when changing companies on its list, with the split and some other transactions with shares. This ratio is «stratified» into two components, one of which is changed only when the company replaced its list, and the other - only for the split and other operations with the shares. Using this bundle divider Dow Jones, its values are translated at the complete exclusion of the divider from its calculation, as well as exclusion from the alternate divider values of each of these two components. The dynamics of the thus obtained new index values compared with each other as well as with the dynamics of its common values and the dynamics of the US GDP. We consider some other factors affecting the value of the index.