Nestle to replace Indiabulls Housing Finance in Nifty
When a stock goes out and a new stock comes in, doesn't that make index levels non-comparable?
No. There are mathematical formulas, which ensure that yesterday's value and today's are comparable, even if a change in composition takes place in-between. Think of an index as a portfolio. The composition of the portfolio changes, but it is still meaningful to keep measuring the overnight returns on the portfolio from day to day. These returns, cumulated up, are the index level.
Nestle and Indiabulls Housing Finance
1) both are from differend industries
2)both management are different
Note:No juice remain in Indiabulls Housing Finance so .......