The formula for calculating the Stock Weight is:
\[ SW = \frac{SV}{PV} \times 100 \]
Where:
Stock Weight is a measure of the proportion of a particular stock's value relative to the total value of the portfolio. It is calculated by dividing the total stock value by the total portfolio value and multiplying by 100 to get a percentage. This metric helps investors understand the significance of a particular stock within their overall investment portfolio.
Let's assume the following values:
Using the formula to calculate the Stock Weight:
\[ SW = \frac{20000}{100000} \times 100 = 20\% \]
The Stock Weight is 20%, indicating that the stock makes up 20% of the total portfolio value.
