To determine the Bear Mkt Factor we analyze the relationship between a stock's price movements and declining markets, hence the name, "Bear Mkt Factor". Ultimately then, the question that concerns us is: on the average, when the market declines, how does a stock tend to react?

How to interpret the Bear Mkt Factor:
Simply take the percentage difference (in basis points) between the decline of the reference index and the performance of the stock. For example, if a stock drops 3%, while during the same time period its reference index goes down 1%, the percentage difference is 2, or 200 basis points. Therefore, our Bear Mkt Factor will be 200. If the decline of the stock is less than that of the index, or if the stock goes up, our indicator will be expressed in a negative number. A negative number indicates that the stock tends to show solid resistance to drops in the market.

Understanding Correlation:
The closer a stock's Bear Mkt Factor is to zero (on either the positive or negative side), the more it will be inclined to mirror its relative index's behavior when the index goes down.

In bi-weekly intervals that correspond to our updates, we track an index's movement over the course of a standard sliding 52-week period. Each time the index goes down we calculate the percentage difference between it and each one of its individual stocks. This difference is then absorbed into the yearly average and expressed in basis points as the Bear Mkt Factor.

Things to remember:

	The higher the Bear Mkt Factor, the more a stock is likely to drop when its relative index drops.
	A Bear Mkt Factor that is strongly negative means the stock is more likely to resist losses in a declining market.