Very unusual problem - any help highly appreciated
Suppose there is a stock (Stock A) and an index (Index A).
Stock A's price=$150
Index A's level=2450
The current ratio of Stock A/Index A Level = 150/2450 = 0.06122
Now supposing you look on the historic ratio chart and think that the ratio will increase from the current 0.06122 to say 0.07500 (ie you think stock A will outperform the index).
Just from knowing the expected ratio (0.07500) and the current ratio level (0.06122), would it be possible to calculate by how much % stock A outperformed the index by ?
Thanks a lot for all your help.