Market proxy

Market proxy,

Definition of Market proxy:

  1. Used for the purpose of simplifying studies requiring a market variable, statistic, or comparison. Market proxy is a broad representation of the overall market. It may not actually be possible to find a true proxy of the market as a whole because a proxy will only represent a small part of the overall market for all risky assets.

  2. A market proxy is a broad representation of the overall stock market. A market proxy can serve as the basis for an index fund or statistical studies. The S&P 500 index is the best-known market proxy for the U.S. stock market. Index funds and exchange traded funds (ETFs) have been constructed to include all, or a portion, of the stocks in the S&P 500 index. Investors and analysts use the price moves in the S&P 500 as the proxy to perform various statistical research on stock market behavioral patterns.

  3. The S&P 500 index is a broad proxy of the stock market based on a market capitalization of 500 large companies traded on the New York Stock Exchange (NYSE) and Nasdaq stock exchange. Market capitalization–or market cap for short–multiplies the company's stock price by its outstanding equity shares. The market cap weighting of the S&P 500 tends to favor larger companies since they have more shares outstanding. As a result, the price moves of the larger companies tend to have a greater impact on the value of the index as compared to the smaller market cap companies.

How to use Market proxy in a sentence?

  1. Index funds and exchange traded funds (ETFs) have been constructed as proxies to include all, or a portion, of the stocks in the S&P 500.
  2. A market proxy is a broad representation of an overall market, such as the stock market.
  3. A market proxy can serve as the basis for an index fund or statistical studies.
  4. The S&P 500 index is the best-known market proxy for the U.S. stock market.

Meaning of Market proxy & Market proxy Definition