What it is:
A composite is a grouping of securities, indexes or other items.
How it works (Example):
One of the most well-known composites in the finance world is the Dow Jones Composite Average, which is a price-weighted average of the 65 companies that compose the Dow Jones Industrial Average, the Dow Jones Transportation Average, and the Dow Jones Utility Average. The stocks with the highest prices have the most influence on the .is price-weighted, meaning that the
Why it Matters:
Composites are broad measures and usually a convenient way to evaluate the performance of a wide array of securities, other indexes or other items. For instance, the Dow Jones Composite Index gives a good indication of the overall direction of the largest companies in the United States: It includes some of the titans of the transportation, utility, financial services, technology, retail, entertainment and consumer goods industries. As such, the economic indicator as well.is not just a measure of performance; some consider it an