PHLX Housing Sector Index - HGX

DEFINITION of 'PHLX Housing Sector Index - HGX'

An index that tracks approximately 20 companies that work directly in the construction market of the United States. The Philadelphia Stock Exchange (PHLX) Housing Sector Index (HGX) is comprised of companies in the building and prefabrication of residential homes, mortgage insurers and suppliers of building material. The HGX was created in January of 2002, and commenced trading on July 17 of the same year with an initial value of 250.

The HGX is calculated as the modified capitalization of the HGX divided by a base market divisor. Similar to the Dow divisor, the HGX divisor changes with stock splits and issues.

BREAKING DOWN 'PHLX Housing Sector Index - HGX'

This index is often referred to as the "Philadelphia Housing Sector Index" and is used to track the strength of the housing market such as home sales and residential real estate values. Essentially, if home prices are up, more construction contracts are signed. This means more revenue for home builders and and an increase in their corresponding shares, which should lift the index up.

Although the index began with an initial value of 250, in February of 2006 the index was subject to a 2-for-1 split. When comparing the value of the index today to the base value, this split needs to be taken into consideration.

RELATED TERMS
  1. Index Divisor

    A number used in the denominator of the ratio between the total ...
  2. Philadelphia Stock Exchange - PHLX

    The first securities exchange to be formed in the United States. ...
  3. Dow Divisor

    A numerical value computed by Dow Jones Indexes that is used ...
  4. Housing Starts

    The number of new residential construction projects that have ...
  5. S&P/Case-Shiller U.S. National ...

    An index that measures the change in value of the U.S. residential ...
  6. Philadelphia Fed Survey

    A business outlook survey used to construct an index that tracks ...
Related Articles
  1. Investing Basics

    The Pros and Cons of Indexes

    Learn about the advantages and disadvantages of stock indexes and passive index funds. Discover how there is an opportunity cost to using index funds.
  2. Fundamental Analysis

    What The Dow Means And Why We Calculate It The Way We Do

    Investors worldwide refer to the Dow every single day, but do you know why we use that formula?
  3. Credit & Loans

    Top US Housing Market Indicators

    A quick overview of the top economic indicators to track the housing market in the US.
  4. Investing Basics

    What's a Market Index?

    A market index combines several stocks to create one aggregate value that’s used to measure a market’s or sector’s performance.
  5. Investing Basics

    What is an Index?

    An index is a statistical means of calculating a change in an economy or market.
  6. Investing Basics

    An Introduction To Stock Market Indexes

    Investopedia explains the five most talked about indexes and what makes them all different.
  7. Options & Futures

    Using Index Futures To Predict The Future

    Want to know whether the stock market will open up or down? Check out the index futures.
  8. Mutual Funds & ETFs

    ETF Tracking Errors: Protect Your Returns

    Tracking errors tend to be small, but they can still adversely affect your returns. Learn how to protect against them.
  9. Markets

    Understanding Capitalization-Weighted Indexes

    A capitalization-weighted index is a market index whose individual components are weighted according to their market capitalization.
  10. Stock Analysis

    3 Index Funds with the Lowest Expense Ratios

    Read detailed information about index mutual funds with some of the lowest expense ratios in their categories, and learn about their pros and cons.
RELATED FAQS
  1. Why is the Dow Jones Industrial Average (DJIA) price weighted?

    Learn how the Dow Jones Industrial Average has told the story of the broad market through its simple, price-weighted calculation ... Read Answer >>
  2. What does the S&P 500 index measure and how is it calculated?

    Learn about what exactly the S&P measures and why it's used by market participants as a tool to understand the broader stock ... Read Answer >>
  3. What is the difference between the Dow Jones Industrial Average and the S&P 500

    Learn about the Dow Jones Industrial Average and the S&P 500, including interesting facts about these indexes, and discover ... Read Answer >>
  4. What does the Dow Jones Industrial Average measure?

    Learn about what the Dow Jones Industrial Average measures and discover the meaning of changes in this important and widely ... Read Answer >>
  5. What economic indicators should an investor in the real estate sector consider?

    Find out about economic indicators and which indicators investors in the real estate sector should take into account before ... Read Answer >>
  6. What are the pros and cons of using the S&P 500 as a benchmark?

    Learn about the advantages and disadvantages of using the S&P 500 as a benchmark for portfolio performance, and understand ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center