Equis plans even more integration with the Reuters Terminal feed with the introduction of a real-time Reuters Terminal version of MetaStock early next year. Market studies suggest that overall market performance is the largest contributor to a stock's return. The second most important contribution to a stock's performance is the stock's industry group. Because one of the keys to successful stock selection is being right on the industry, some of our recent work has focused on this area. The stock market is more than a collection of individual stocks.
Stocks tend to gather together naturally into business or industry groups.
In our recent work, we have gone through more than 2,000 stocks and created 131 industry groups. We started with traditional group structures but soon realized that it was important to have a group structure that more accurately reflects the current market and modern economy. What makes our approach uniquely useful is the manner in which specific stocks are assigned to industry groups. To determine the group structure, not only is each company's generic business considered, but also its stock's trading pattern . As a result, our industry group structure is especially sensitive to market action.