What is represented in the figure?

Each group of stocks is matched with its own rectangular lying on the main diagonal, connecting the lower left corner with the upper right corner. Group numbers are specified on the vertical axis. The number of each group's companies is specified on the horizontal axis.

On the a whole, the entire group parameters are characterized by parameters of the company most typical for this group (the center of the group). As a rule, the center group parameter values are closest to the entire group's average. Groups of companies can be compared (by given group parameters) via comparing only their center parameters.

Each company is matched with a thin vertical line along the entire height of the figure. Color of each fragment in this vertical line is determined by "closeness" of this company parameters to parameters of the center of the group. The closer the company to the center of the group, the darker is the fragment color, and vice versa (see palette on the figure's right). For example, if moving upwards along the vertical line the sequence of fragments looks like black-yellow-beige, it means that the company is located closer to the center of the first group, not so far from the center of the third group, while being the farthest from the center of the second group.

Sharp color contrast between rectangulars of the main diagonal and the others means that there are strict borders between the groups.

Recommendation: absence of sharp contrast between rectangulars of the main diagonal and the others tells about absence of distinct borders between groups. In this case, one can try changing number of groups. However, one must keep in mind, that clear-cut borders for the selected parameters may not exist at all. In that case precise breakdown, of course, will be impossible.

Color filling of each group's rectangular reflects uniformity of the group. If the appropriate group rectangular is painted evenly (ideally in black or some gradient of dark color), the group is homogeneous. If it is painted unevenly, there must be some parameter disorder inside this group. One possible explanation is that there is an internal structure inside the group (there might be several groups in there).

Recommendation: if filling is uneven, and the most of the group companies are painted in light tones, the group is non-homogeneous. In this case, it is possible to increase the number of groups or apply grouping procedure to this group only.

StockPuzzle Demo

Click here to learn more about StockPuzzle