Inspiration
We thought about a lack of access to financial resources can make investing difficult for first-timers. While indexes like the S&P 500 offer a broad overview of the U.S market, sometimes you might want to expose yourself to specific sectors (like technology, or communications) or omit certain stocks.
What it does
Our project allows users to pick any number of sectors of the S&P 500 to create their own combination of stocks in what's essentially a "customized" index fund. As well, once the user makes their decisions, the project computes historical performance and other financial metrics (like the Sharpe ratio) to show the user how their index might perform in the future.
How we built it
We used Yahoo Finance's API to scrape day-by-day ticker data for all the S&P 500 stocks, then categorized each company into sectors. Next, we calculated rate of returns and Sharpe ratios for each of the stocks, as well as weighted averages based on market cap (like how real index funds work) for the user's choices.
Challenges we ran into
Dealing with the raw stock data (hundreds of megabytes, over the last ten years), cleaning it by making sure stock splits don't affect the price, then converting Sharpe ratios from daily to annualized took a lot of work. There were also difficulties confirming if our mathematical calculations were right, since there aren't any projects or datasets online that replicate what we did.
Accomplishments that we're proud of
Our data cleaning and wrangling was definitely an accomplishment, as well as designing the website for user input and customizability.
What we learned
We learned how different sectors in the S&P 500 work, as well as financial indicators like the Sharpe Ratio. Web design and user input was also a big part of our project, which we learned on the spot.
What's next for Indexwise
We want to expand into other assets, possibly like bonds or cryptocurrency to offer the users a wider variety of investment opportunities. As well, we could add subsectors and stocks from other exchanges in the future.
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