New! RocketCap’s Cyber War Stock Index

Posted on February 1st, 2013 by admin in Intellectual Property, Market Indexes

Today we announce our latest stock market index. RocketCap’s Cyber War Stock Index (RCWSI) (C)  is an equal weighted portfolio of publicly traded companies whose purpose is to provide tools and services to fight internet based malware and other forms of attack.

The companies are listed here:

RCWSI List

 

 

 

 

 

There are many other important firms providing web security, such as Lockheed Martin and Northrop, but they derive most of their sales from non-web security products. Some important pure play firms are not publicly traded, such as Bitdefender and Kaspersky Labs. For each of these firms, their security products and services account for essentially all of their sales. They are thus “pure play” web security firms.

As usual, we illustrate our indexes with a combination of plots of gross returns, and correlations.

Recall that gross return (GR) between two dates Date1 and Date2  is simply defined as:

GR= (Price_Date2  – Price_Date1)/Price_Date1

Thus, we can compare stock prices starting from the same relative value of 1, and see how they all return value over time. We choose Date2 as 1-31-13, and Date1 either 3 months or 12 months earlier. These plots are shown here:

12-Month gross returns3-Month gross returns

 

 

 

 

 

 

 

Over the last 12-months, RIPSI and RCWSI bracketed the S&P 500 returns, but over the last 3 months, the S&P 500 return fell below both indexes.

The correlation matrixes over these time periods are here:

Correlations Daily Returns 2013-1-31

 

 

 

 

 

 

 

 

 

 

RIPSI is moderately correlated with RCWSI over both time intervals, which is not too surprising since the anti-cyber war firms all support companies that leverage IP. The S&P 500 correlates more with RIPSI than with RCWSI over both periods.

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