Average turnover rate
factor.formula
Average turnover rate calculation formula:
Among them, the daily turnover rate calculation formula is:
In the formula:
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Average turnover rate in the last K trading days
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Turnover rate on the tth trading day
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The length of the time window for calculating the average turnover rate, in trading days. For example, K=20 means calculating the average turnover rate of the last 20 trading days.
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The trading volume on the tth trading day, usually expressed in the number of shares.
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The circulating share capital on the tth trading day is the number of shares that can be freely traded in the market. The circulating share capital does not include restricted shares and other shares that cannot be freely traded in the market.
factor.explanation
The average turnover rate reflects the level of stock trading activity within a specific time window and is a key indicator for measuring stock liquidity. A higher average turnover rate indicates that the stock is frequently traded in the market, has good liquidity, and attracts more investors, but it may also imply high market sentiment and more speculative behavior; a lower average turnover rate may indicate that the stock has poor liquidity and is not highly concerned by the market. This indicator can be used to identify stocks with high liquidity and assess market sentiment and speculation levels. The selection of the time window K will affect the sensitivity of the average turnover rate. A shorter time window may be more sensitive to short-term trading activities, while a longer time window will focus more on long-term trends.