Day Trading & Forex Forum

Jim Nasium

Do you think there are any FTSE 100 shares which follow the trend of the FTSE 100 closer than others? For example today the FTSE opened down, what stocks would you say have a higher chance of following it? Maybe there is sector or industry? Any thoughts?

tomorton

Decent software or websites will show you the relationship betwen a share price and the FTSE as beta. This can vary about 1.0, this median level expressing a 1% rise in the FTSE as a 1% rise in the share. Sharescope will do this for shares, sector indices, anything listed really. Beta values can be above 1 or below 1 but you should be aware of the time period over which this is being judged.

I do believe that if you create a portfolio of only the biggest cap 20 FTSE100 members you will track the FTSE itself to a very high percentage. Certainly adding in the 250 additional shares to the FTSE100 to make up the FTSE350 makes very little difference.

edwinraymond

The only ones that follow the ftse is AAL (Anglo american ) then RDSB (Royal Dutch shell). and BP perhaps. I know mining indices was the bell weather for the ftse not sure now as the market and my trading style has changed

nickel80

The FTSE is made up of 100 constituents, so it will reflect the movements of those 100 stocks, but since it is a value-weighted average the stocks with higher market cap will count more. Since market cap will also change on a daily basis, you won't find a stock which behaves too closely to the FTSE, IMHO.

Also, industries behave differently (in normal mkt situation, not in the bloody mess we're in), so you will find that when some go up, others might go down. Strictly speaking, it is the index which follows a basket of stocks, not the stocks that follow the index.

The best guess would be to pick the top companies in terms of market cap and work from there. Check this out:
FTSE 100 Index - Wikipedia, the free encyclopedia