DEFINITION of 'Arithmetic Index'
An index of securities that uses an arithmetic sum to determine changes in the index without taking the relative size of the securities into account. An arithmetic index of stocks does not incorporate weightings based on market capitalization, price, or any other metric, but merely calculates the raw changes in each component, then divides the sum by the number of index components.
Also known as an "unweighted index".
INVESTOPEDIA EXPLAINS 'Arithmetic Index'
Most stock indexes are marketcap weighted, which means that the largest companies will exert a larger influence on the index that the smallest. The Standard & Poor's 500 Index and the Nasdaq100 are both marketcap weighted, while the Dow Jones Industrial Average (DJIA) is priceweighted. The Value Line index is calculated arithmetically, although few other major indexes fail to account for the size of their components in some way.

Arithmetic Mean
A mathematical representation of the typical value of a series ... 
Market Capitalization
The total dollar market value of all of a company's outstanding ... 
Standard & Poor's 500 Index  S&P ...
An index of 500 stocks chosen for market size, liquidity and ... 
Geometric Mean
The average of a set of products, the calculation of which is ... 
CapitalizationWeighted Index
A type of market index whose individual components are weighted ... 
Market Value
The price an asset would fetch in the marketplace. Market value ...

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