Hi,
In the calculation for relative OHLC in cell 8 in section 3 unit 11 Ipython notebook, the adjustment factor is multiplied to get the value. But, the ajustment factor is calcualted on the close of SPY and not the OHLC of the SPY.
Should'nt the OHLC of the SPY be used to calculated OHLC adjustment factor and thus OHLC relative OHLC ?
Thanks,
Venkataraghavan
Hello Venkararaghvan,
As the definition of a relative series is mentioned in the notebook. The OHLC is calculated relative to the close of the benchmark, in this case, SPY. So, we want the OHLC of the stock to be relative to only one series which is the adjusted close of SPY. However, you could have also taken separate adjustment factors for each of OHLC based on the OHLC of SPY. The aim is to finally get a relative series for comparison.