What is weighing?

What Does weighing Mean

From the Latin ponderatio , weighting is the weight or relevance that something has . It is also the attention, consideration and care with which something is said or done. The concept is common in stock markets, where it talks about the weight that each share has with respect to the index. In this case it is determined by making a comparison with the volume traded.

For example: Telefónica , Grupo Santander , BBVA , Iberdrola and Repsol YPF are the securities with the highest weighting in the Ibex 35 , the main indicator of the Madrid Stock Exchange . These five companies determine more than 67% of the selective, while the remaining 30 companies do not reach 33%.

This means that the behavior of the five main actions has much greater influence than that of the other thirty. Therefore, the rise or fall of the index will depend almost exclusively on the most important values.
In other words, when it is said that the Ibex 35 (or another stock market indicator) rose or registered a positive balance, it does not mean that all the shares have advanced or that most of the titles have managed to rise. Stock indices can close positive even when most stocks have posted losses , which can be explained by weighting.
Weighting is also the exaggeration of something or the action of weighing something : "The words of the old caudillo have a particular weighting within this political movement " , "The weight of the captain in the group is unquestionable . "
In mathematics , the weighted average is a relatively more complex method than arithmetic for calculating the mean, but it is very useful on a practical level. To define it, we will use the following example: a teacher tells his students that the final exam will be worth three, so that when calculating the grade point average, the grade obtained in the latter case must be taken into account three times; if the values ​​were 60, 70 and 65, their average would be obtained by performing (60 + 70 + 65 + 65 + 65) / 5.
If, on the other hand, it is desired to apply the weighted average method to said problem, a table should be made in which the qualification , its weighting and the resulting value of the multiplication of the first two will be located in columns ; Therefore, 60 and 70 would have a weight of 1, while 65 would correspond to 3. Finally, as in the traditional way, the numbers obtained (60 + 70 + 195) would be added and divided by 5 ( the sum of the weights ).

The application of the weighted average method (also known as weighted average) is especially useful when the averages of many values ​​with different weights must be calculated, as is the case in the study of per capita income of several countries. Through these simple steps, it is possible to obtain a better organization and control over the figures, being able to easily identify an entry and modify it without having to recalculate the entire formula.
The grading systems of the student centers use the concept of weighting parameter to assign a particular weight to each group of exams, which influences the average grade, since it returns a different result than the one that would be obtained simply by adding all the marks and dividing them by the amount. This value determines in advance how important each test is when weighing a student's level to access a course or career. These are numbers that, in general, are not greater than 0.2 and that usually affect the average in tenths.

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