Tracking Daily Sensex Valuation based on Intrinsic and relative valuation
Using our Intrinsic and Relative valuation models, we have been tracking daily pricing of Sensex and identifying Top-5 over/under valued stocks.
Intrinsic Valuation Model (IVM)
I have covered this modeling approach in another post below(Sensex Valuation), but it calculates intrinsic value of Sensex based on Analyst estimates of ROE, EPS growth, India debt rating and other financial variables. Our pricing engine updates all these financial parameters daily and re-calculates Sensex intrinsic value.
We also have Sensitivity Analysis tool ( paid service ) that investors can use to input range of values to Financial models and generate Sensex pricing over that range. Pls email contactus@finowledge.com for more details.
This model is targeted towards long-term (>5 yrs) investors.
Relative Valuation Model (RVM)
This approach uses multi-linear regression model to control for different financial parameters and identifies cheap and expensive stocks.
RVM is a relative pricing model, which doesn’t guarantee that market is correctly pricing securities. What this model guarantees is that given the pricing of Security A, Security B should be correctly priced. Hence, this model identifies relative mis-pricing discrepancies that investors can leverage to make profits. This pricing model runs daily against updated financial variables for Sensex.
This model is geared more towards short/mid-term investors.
Using our Intrinsic and Relative valuation models, we have been tracking daily pricing of Sensex and identifying Top-5 over/under valued stocks.
Intrinsic Valuation Model (IVM)
I have covered this modeling approach in another post below(Sensex Valuation), but it calculates intrinsic value of Sensex based on Analyst estimates of ROE, EPS growth, India debt rating and other financial variables. Our pricing engine updates all these financial parameters daily and re-calculates Sensex intrinsic value.
We also have Sensitivity Analysis tool ( paid service ) that investors can use to input range of values to Financial models and generate Sensex pricing over that range. Pls email contactus@finowledge.com for more details.
This model is targeted towards long-term (>5 yrs) investors.
Relative Valuation Model (RVM)
This approach uses multi-linear regression model to control for different financial parameters and identifies cheap and expensive stocks.
RVM is a relative pricing model, which doesn’t guarantee that market is correctly pricing securities. What this model guarantees is that given the pricing of Security A, Security B should be correctly priced. Hence, this model identifies relative mis-pricing discrepancies that investors can leverage to make profits. This pricing model runs daily against updated financial variables for Sensex.
This model is geared more towards short/mid-term investors.
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