Hello Jack,
Using Automatic Investor to analyze historical data and display the results is a great way to determine AIM-ability. The frequency and amplitude method is simply another way. It basically counts the number of times over the past 250 trading days that the 26 week average price has differed from the actual price (exactly half way in the 26 week period) by more than 15%. It does this for the open, high, low, and close prices and adds the 4 values together to determine the volatility rating.
I've tested this on about 25 stocks and funds and it seems to work as I expect. However, since it is using a relatively short-term time frame, perhaps your results with GAC.TO and CTRA.TO aren't coming up as you expect because you're used to a longer time frame. You can also try plugging in different end dates to see if the results are more in line with what you expect.
However the tool is just another way to determine a stock's volatility. One of the things I'm toying with right now is to make the time frame user-selectable. Therefore you could conceivably use it to measure volatility over longer periods (not just 250 trading days).
In the end, however, I think everyone has to use the screens with which they are comfortable and if your methods are giving you good results, then there's no reason to change. When I saw Barry's algorithm, I liked the theory behind it (the whole frequency and amplitude thing), so I implemented it.
Thanks for your feedback, please let me know if you have anymore comments.
Regards,
Mark. |
