60-day earnings-to-market ratio change
factor.formula
Latest Earnings-to-Market Ratio - Earnings-to-Market Ratio 60 Trading Days Ago
The formula calculates the difference between the current time point (t) and the profit-to-market ratio (EP_t) 60 trading days ago. The difference reflects the change in the profit-to-market ratio over the past 60 trading days.
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The earnings-to-market ratio at the current point in time (t) is usually calculated by dividing the company's earnings in the most recent financial report (e.g., annualized net profit or TTM net profit) by the current market value.
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The earnings-to-market-price ratio 60 trading days ago is calculated in the same way as EP_t, but uses earnings data and market value data 60 trading days ago.
factor.explanation
This factor determines the valuation trend of stocks based on the changes in the earnings-to-market ratio. A positive value indicates that the current earnings-to-market ratio is higher than 60 trading days ago, which means that the valuation of the stock may become more attractive (cheaper) relative to profitability. Conversely, a negative value indicates that the valuation may decline (more expensive) relative to profitability. This factor implies the market's response to changes in the company's earnings expectations and may also be affected by changes in market sentiment and overall valuation levels. It needs to be combined with other factors and market environment for comprehensive analysis and is not recommended to be used alone.