Is there a relation between how much the stock value can change when the Index value changes.

For example, the stock price of a XYZ stock is $49.37, and NASDAQ index is 8704. The Index drops by (-0.46%) to 8665. The stock price of XYX drops by (-0.79%) to $48.98. If this scenario repeats the next day, is it highly possible that the relation of (-0.46%):(-0.79%) will repeat?

  • 2
    The odds of both stocks dropping exactly those respective amounts are very low. Dec 1, 2019 at 15:09
  • 1
    You can calculate the correlation coefficient between movements of the index and movements of the specific stock. But you shouldn't fool yourself into thinking that this statistic will remain constant in case of changes in real-world conditions.
    – The Photon
    Dec 1, 2019 at 17:48

1 Answer 1


If the stock isn't included in the index, there is no direct connection between the stock price and the index value.

Even if the stock is part of the index there is again no direct relationship between the index and the stock price. In the case of the Dow Jones Industrial average which is made up of 30 different companies, there are many days where the index goes up but a company in the index goes down. The economy could be great, but that one company had a bad quarter so there price goes down.

With 500 companies in the S&P 500, and other indexes having thousands of companies it would be a very rare day for every stock to move in the same direction, let alone at the same percent change.

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