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Definition of 'Nova/Ursa Ratio'
A sentiment indicator based on the Nova and Ursa funds from the Rydex Fund Group. The Nova fund is bullish with a target beta of 1.5. Whereas, the Ursa fund is bearish with a target beta of -1.0. This ratio can be used as a proxy for the direction of market sentiment. More specifically, a high value represents a bullish sentiment and a low value represents a bearish sentiment.
Calculated as:
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Investopedia explains 'Nova/Ursa Ratio'
For example, A beta of 1.5 means that Nova has a target of 150% of the S&P 500 Index. Ursa's -1.0 means it has a target performance inverse to the S&P 500 Index. That is, if the S&P 500 is down 10%, Ursa should be up 10%.
Rather than just measuring someone's opinion about market direction, this ratio shows where people actually are putting their money.
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Search results for 'Nova/Ursa Ratio'
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http://www.investopedia.com/ask/answers/09/nova-ursa-ratio.asp
... How do I use the Nova/Ursa ratio? The Nova/Ursa ratio is a contrary indicator
designed to gauge market sentiment among retail investors. ...
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