NASDAQ vs Dow Jones

6/1/2021

Stock data analysis and data visualization with Quantmod, Magrittr in R
Written by Tela Advisor January 6, 2021

Stock analysis expert use words often such as the "DOW" was up 500 basis point, or the "NASDAQ" is down 70 basis point in a similar connatation failing to understand that both are different. Dow Jones Industriel average (DJIA) refers to stock market index that measures the stock performance of 30 large companies listed on stockexchanges in the united states. It is one of the most commonly followed equity indices.

whereas NASDAQ is an electronic exchange system that stands for the National Association of Securities Dealers Automated Quotients Exchange. NASDAQ also refers to an index(NASDAQ100, 102 equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock market. It is a modified capitalization-weighted index.

The stocks weights in the index are based on their market capitalizations, with certain rules capping the influence of the largest components. It is based on exchange, and it does not have any financial companies. The financial companies were put in a separate index, the NASDAQ Financial-100.). Hence it is used in two different ways, i.e. an exchange and also an index that presents a certain portion of the market. Here we discuss the NASDAQ vs Dow Jones in R.

Stock data analysis and data visualization
with Quantmod, Magrittr in R

LOAD PACKAGES
library(quantmod)
library(magrittr)
library(ggplot2)

Now that our libraries are uploaded, let’s start to pull the stock quote data for NASDAQ and DJI. Since we will be manually pulling in the data from a financial source (YAHOO! FINANCE), there will be no need to load a dataset.