Understanding SQRT in Stock Indexes (NIFTY)

SQRT plays a key role in financial modeling for stock indexes—particularly in volatility scaling (via the "square root of time" rule) and price prediction (via the Square Root Theory). It's not used directly in calculating the index value itself (e.g., market-cap weighting), but in analyzing and forecasting index behavior.
I'll break it down step-by-step, with examples in this video.