Index Domination and Beta Estimates

There are a number of indices that are dominated by one or a few stocks. One of the most striking cases was the Helisinki Stock Exchange (HEX) in the late 1990s. Nokia, the telecommunications giant represented 75% of the Helisinki Index, in terms of market value. Not surprisingly, a regression of Nokia against the HEX yielded the results shown in Figure 8.3.

Figure 8.3: Beta Estimate for Nokia for explanation, <MENU> for similar functions. Screen Printed

HISTORICAL BETA

P25S Equity BETA

FH Equity

Relative Index

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