Develop New Proprietary Indicators More Suited to Investors
VectorVest ranks stocks, sectors and industries by VST which is calculated from the square root of the weighted sum of squares of RV, RS, and RT. Weightings are highest for RT, followed by RS, and lastly RV as illustrated:
VST = (0.27*RV^2+0.33*RS^2+0.40*RT^2)^0.5 approximately
VST is an excellent proprietary parameter for traders. However, investors should also be interested in the longer-term ranking by considering Comfort Index (CI) in place of RT. Perhaps this could be represented as:
VSC = (0.27*RV^2+0.33*RS^2+0.40*CI^2)^0.5 subject to VV optimization
Additionally, it may be even more beneficial for long term investors to incorporate Growth (GRT) in place of RV. However, this would first require VectorVest’s normalization of GRT on a 0.00 to 2.00 scale. In the interim, investors could rank stocks by:
RS*CI*GRT
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