Replies to post #35924 on A.I.M. Users Bulletin Board (AIMUSERS)

[Conrad]

Karw,
I checked my sigma calculation and you are right! I must have made some mistake.
I get:

STDEV = 8,633194181 from Excel. This is approx. the same as you got.
The definition here is for a Sample of a Population.

STDEVP= 8.319154073
The definition of this is for a Complete Population


I am sort of questioning the rationale behind these formulas.

1)You start out calculating

Buy Hold Zone (Fraction) = sigma / (PC/sh + sigma)

PC/sh = Starting Price(SP) for an AIM Portfolio.

As you start buying and selling with the future prices then the SP changes, depending on which day you start your AIM. For a volatile stock you might get different Hold Zone values if you would start an AIM at different days after the Historical Data Set.

2) What is the basis for using sigma? Why not any of the other statistical functions? Why not use

Buy Hold Zone (Fraction) = 3*sigma/(PC/sh + 2*sigma)

or any other combination of the variables?