3 ms·
At the risk of gross oversimplification (or maybe total misunderstanding), is this roughly the same as the difference between average and mean?
by zhengyi13 1y ago
At the risk of gross oversimplification (or maybe total misunderstanding), is this roughly the same as the difference between average and mean?
- dcre 1y agoAverage and mean are the same thing. I assume you meant median. It’s similar in this case, but it’s really more like the different between the average of the full list of companies and the average of the full list of companies with the top few hundred removed.
- zhengyi13 1y agoAhh, thank you, yes - median. Thank you as well for the explanation.
- CGMthrowaway 1y agoYes what you are looking for is market-cap weighting (S&P 500) vs "equal weighting" (e.g. the RSP etf) which gives 1 weight to each of 500 stocks, rather than weighting by size of the company. PE ratio of S&P 500: 31 PE ratio of RSP: 21