Example of a badly performing stock exchange price in TOPIX

This stock exchange price is one of those which are registered in Tokyo Stock Exchange (TSE) market.

The TOPIX stands for the Tokyo Price Index of this market.

While exchanging the stocks, investors refer to the index of the average stock exchange price of a particular market they belong to such as the TOPIX for this company. 

The passive trading aims at modestly keeping the profit by buying and selling those stocks more or less following the index by referring to the index price.

The active trading aims at aggressively increasing the profit by buying and selling those stocks outperforming the index. 

Those stocks registered in the prime market usually follows the price movement of the index. 

However, since this month, this company's stock price has started deviating from the counterpart of the TOPIX, and it is substantially underperforming. 

The majority passive traders will be very likely to omit this company's stock from their fund portfolio.

It is an opposite phenomenon from what active traders usually expect for unless they expect for the stock price returning to the index. 

 

In addition, we must also focus on the international market. 

The aforementioned price is based on the value based on Japanese Yen (JPY).

This means that the price plunge is much steeper in terms of the international market where they are traded with other than JPY.

 

This is the JPY price index compared to the major other currencies all together.

In this half year, JPY has already been substantially plunging. 

Some high-profile investors have purchased a massive amount of Japanese company stocks while the price dropped as though it were a bargain-sale for them.

In contrast, this particular company stock mentioned here does not seemed to be favoured by these investors.

These high-profile investors' action is so influential that it usually reflects the index performance too. 

Moreover, these investors also carefully refer to the fundamental of companies such as their executives' management skill, the potential of these companies' products, and the expected return of their profit. 

This price depreciation seems to imply the deteriorating fundamentals overall. 

This is why it is important to compare with the market index a particular firm belongs to.