COMBINING INDICATORS

Sat, 09 Nov 2024 16:15:41 GMT

![Image](https://upload.cafenono.com/image/slashpagePost/20241110/011556_F9SCf3DEFKM1zAWATU?q=80&s=1280x180&t=outside&f=webp)

## Motivation

Do you wanna buy a share with _high growth _**_or_**_ low valuation _or _high growth _**_and_**_ low valuation_?

## Description

Eventually, we desire to compound an investment portfolio based on two or more quantitative indicators.

In this case, we can combine these indicators (or maybe their ranks) to create a new one and rank the best choices.

This combination can be linear (simple mean) or geometric (geo mean).

When it's a linear, both indicators can result a higher value easier. But on gometic formula, both must have a high value to produce another high value.

## Formulas

Linear combination = (X + Y) * (1/2)

Geometric combination = (X + Y)^(1/2)