Portfolio Management [TrendX_]

1월 27일

Portfolio Management is a powerful tool that helps you create and manage your own portfolio of stocks, based on your risk and return preferences.


*** Note: You should select the appropriate index for each stock as the benchmark to compare your portfolio’s performance.

*** Note: You should apply the indicator to the same chart as the benchmark, so that it can capture the historical trends of all the 10 stocks in your portfolio.




USAGE

• Analyze your portfolio’s return factor, which shows the compound annual growth rate (CAGR) of each stock and the portfolio as a whole, as well as the weight of each stock in the portfolio.
  
  

• The Weighting approach contains 2 options, Equal and Growth-based method:
  
  

• Customize your portfolio by selecting up to 10 stocks from a wide range of markets and sectors:
  
  

• Compare your portfolio’s performance with a benchmark of your choice, which is the S&P500 by default setting.
  
  
  
• Evaluate your portfolio’s risk factor, which includes the capital asset pricing model (CAPM), the portfolio beta, and the Sharpe ratio of both the portfolio and the benchmark:
  
  

- CAPM is a model that calculates the expected return of the portfolio based on its risk and the risk-free rate of return.

- Portfolio beta is a measure of how sensitive the portfolio is to the movements of the benchmark. A beta of 1 means the portfolio moves in sync with the benchmark, a beta of less than 1 means the portfolio is less volatile than the benchmark, and a beta of more than 1 means the portfolio is more volatile than the benchmark.

- Sharpe ratio measures how much excess return the portfolio generates per unit of risk. It is calculated by subtracting the risk-free rate of return from the portfolio’s return, and dividing by the portfolio’s standard deviation. A higher Sharpe ratio means the portfolio has a better risk-adjusted return. A Sharpe ratio of more than 1 is considered good, a Sharpe ratio of more than 2 is considered very good, and a Sharpe ratio of more than 3 is considered excellent.

• Adjust your portfolio’s rebalancing strategy, which determines when and how to change the weight of each stock in the portfolio to optimize your return and risk objectives. The tool also suggests a default hedging-stock asset, which is the US dollar interpreted through the dollar index (DXY):
  
  

- The dollar index is a measure of the value of the US dollar relative to a basket of other major currencies. It is often used as a proxy for the global economic sentiment and the demand for safe-haven assets. A rising dollar index means the US dollar is strengthening, which may indicate a bearish outlook for the stock market. A falling dollar index means the US dollar is weakening, which may indicate a bullish outlook for the stock market.

- The rebalancing strategy suggest increasing the weight of the hedging-stock asset when the dollar index is under positive supertrend condition, and decreasing the weight of the hedging-stock asset when the dollar index is in the downward supertrend. This way, you can hedge against the adverse effects of the stock market fluctuations on your portfolio, simply you can just cash out at the suggested hedging weight.




CONCLUSION


Investors can gain a deeper insight into their portfolio’s performance, risk, and potential, and make informed decisions to achieve their financial goals with confidence and ease.




DISCLAIMER


The results achieved in the past are not all reliable sources of what will happen in the future. There are many factors and uncertainties that can affect the outcome of any endeavor, and no one can guarantee or predict with certainty what will occur.

Therefore, you should always exercise caution and judgment when making decisions based on past performance.