Tag Archives: asset

Comparing my assets with its benchmark: some figures for analysis

Comparative figures asset benchmark

As investors, we look for the best performance. A good performance is not only an absolute figure, but also a relative one, when we make comparisons. For instance, if a share in our portfolio has a performance of 10% in a year, we can think that it is a nice number, in absolute terms. But if the reference index of the share has performed a 15%… well, it is not so nice. That is why it is interesting to take into account some figures to understand if our securities have a good quality compared with their benchmarks:

  • Relative trend of the security versus index: it compares both behaviours. If the figure is positive, the security is strong versus the index. If it is negative, there is a weakness. It is one sign to detect if our stock or fund is performing properly against the index.
  • Tracking error: this indicator measures the deviation of the difference in daily returns of the security and the benchmark. A higher figures shows that the daily returns of the security has a larger difference compared with the daily returns of the index.
  • R 2: it measures the similarity of the daily behaviour of both the asset and the index. If the figure is near to 1, there is a strong parallelism. If it is near 0, there is no relation.
  • Correlation: if R 2 measures the similarity of the behaviour, this provides more specific information. If the figure is near to 1, there is a positive correlation (both move identically in the same trend). If it is near to -1, the correlation is negative (both move identically in opposite trends). If it is near to 0, there is no correlation.

R 2 and correlation are very important to find assets not linked with the benchmark if its evolution is negative, for instance, when the index drops. On the other hand, it is also interesting to find correlated assets when the index soars.

  • Alpha and beta: both are quite important to measure the outperformance and volatility of the asset compared with the benchmark. We have an extended explanation in this post. Typical investor behaviour is looking for assets with good alpha.

Of course, the analysis of a single reference is not enough to get an idea about the relationship between the asset and the index. We have to look at all data and connect them to understand in a right way if we should put our money there or just go our quickly.

T-Advisor teach to manage your portfolios with easy videos

T-Advisor corporate message

We currently live in a time in which videos has become the main tool to communicate. In our case, we are always on the wave and that is why we have produced a collection of video tutorials to teach how to manage your portfolios in T-Advisor. This collection is organised in our platform in three different items:

  • I want to plan my investment goal and create a portfolio to achieve it.
  • I want to analyse my investment portfolio and assess it.
  • I want to look for assets to create an investment portfolio.

We are aware that our tools have some complexity, if you are new in finances, but we also know that our platform is one of the most powerful and complete in the market. And we offer it for individuals just for 0 euros. These videos and their organisation in three different items depending the personal interests help everyone to enjoy finances.

If you want to take advantage of using T-Advisor, just click on the following links to show these short tutorials and learn more about your platform to manage professionally your financial investments:

Just enjoy them to improve your financial abilities!

Risk and volatility: they are not really the same

risk and volatility in T-Advisor screener

We often read comments about the high volatility of any asset, as it would be a sign of a high risk. That is not necessary true, because you can find different assets with similar volatility and different returns: some positive and some negative.

Volatility reports about the variation of an asset price in a certain period or the deviation of its returns from the average. A high volatility suggests strong ups and downs in the asset price. That means for current investors that it is more risky, as they can lose money more quickly… but they can obtain also higher returns.

The question is that volatility is not a measure of risk taken as an only figure. It has to be linked with other measures. For instance, you have to watch the liquidity, because an illiquid asset is more risky, as it is more difficult to sell and obtain your money back.

Volatility also reports about the past, because it is the mirror where you find the information about what happened with the prices till today. You cannot obtain other information about risk. For instance, it does not report about the counterparty risk, let’s say, you invest in bonds and the issuer has no money to pay your coupon. To obtain those data, you have to look at other parameters.

The list of risk is long, but you cannot perceive them through the volatility. It is very important for investors to understand the difference, as many get good returns trading with the volatility of the asset. As we commented above, it can be an opportunity.

A relevant measure for the risk is the Value at Risk, also known for their initials VaR, but you have to watch also the diversification (in the case of a fund or your own portfolio), the correlation with other assets or the liquidity. To sum up, if you consider the volatility as the only way to control the asset risk, you will make a mistake. The risk analysis is a combination of several figures that have to be linked to obtain a global perception.

Screener: the comprehensive asset search engine

Screenshot from T-Advisor Screener

One of the most tiresome activities for an investor is how to get a good search engine to find assets. All are limited, because they do not filter what we would like or provide only some figures. Of course, there are full products, but the price is only acceptable for companies or fund managers.

T-Advisor has developed the right tool: the Screener. This is a search engine to find all kind of assets except commodities and derivatives. There are several possibilities to find the asset you wish:

  • Name
  • Asset type: ETF, funds, stocks, bonds, indexes, cash and currencies
  • Market: up to 60 worldwide
  • Managers: up to 140 worldwide
  • Currency: the 35 most important and traded
  • Asset class: up to 18 different ones

Some other possibilities to sort are:

  • Our score: to find de best quality assets to invest
  • Performance: for different timeframes
  • Volatility: for 1 year
  • VaR: 95% for 1 year
  • Price range: with a minimum and maximum price.

Once you screen, you obtain a great deal of figures to analyse the assets. Apart from the common summary, with the closing price, the change and our score, you have separated tabs to watch the performance for different timeframes in a row, figures related to the asset risk (VaR, volatility and maximum drawdown) and trend signals charts. You can rank all categories from the highest and upside down. You can also click on every asset to obtain the T-Report, our in-depth report of every security in our platform.

We live in a world full of information, but it is useless, when it has no order or we cannot find what we need. The Screener is the solution for smart investors who bet for a self-directed model: an easy-to-use and quick search engine to find the assets you are looking for. The price: free. Why should investors pay for good relevant information to create their own portfolios?

T-Advisor gets more social with new recommendation asset tools

A year ago, T-Advisor faced a great evolution with the 3.0 version. A user-friendly look and feel, new tools and innovations and, above all, the creation of a financial community. These breakthroughs have opened new possibilities and we have answered to them.

The exchange of ideas is one of the great demands amongst the users of every financial solution. Nobody wants to feel alone. We prefer to share our knowledge, experiences and ideas. This is the point of our recent evolution in T-Advisor 3.0. We get more social and promote the exchange of recommendations. How?

  • A new asset report with recommendation options

New asset report in T-Advisor

Don’t worry! We keep our T-Report, but we show the assets with a more attractive and easy-to-understand design. You can include the asset in your own portfolios clicking on the portfolio icon or just follow its evolution clicking on the chart icon. In addition, you can recommend buying or selling the asset.

  • Follow-up of other users’ recommendations

All your followers will receive an alert in their notification inbox when you do any bullish or bearish recommendation. In the lower modules of the asset report, you will also find the user that makes a recommendation. If you click on your user profile, you can watch all your recommendations with statistics and filters to select the information.

Recommendation module in personal user profile in T-Advisor

  • A specific tab with all recommendations

The module “Investment ideas” enlarge the contents with a tab for all recommendations made by our users. You can select buy and sell proposals and the asset category. There are two rankings: the most recommended assets and the users that recommend better.

Recommendation tab in investment ideas module in T-Advisor

Our social features in the beginning are still there: ratings for users and portfolios, users medal and score portfolio rankings, the chance of following other users, amongst others, as we already commented in former posts.

If you are already a T-Advisor user, let’s begin sharing. Recommend your favourite assets or warn about your worst selections. If you are not a user yet, we invite you to discover our community where self-directed investors are ready to share their knowledge and apply the best advance investment tools to obtain the best results. That happens only in a platform: T-Advisor!

Portfolio optimizer: a tool to improve your investments

Investors organise efficiently their portfolios to obtain the highest returns, but a portfolio has to be followed up, because some adjustments are sometimes necessary. The problem is how to detect the best changes to get the profit goals. That is why T-Advisor developed the tool “Optimizer” for this target.

Optimizer T-Advisor

In the Optimizer, the investor can choose the expected return and volatility depending the term (shorter or longer), as the percentage of acceptable volatility and the weight limits per assets. Clicking on the “optimize” button brings the results.

From the beginning point and the chosen settings, the tool calculates different parameters. The efficient frontier is a visual comparison between the current position and the optimal one, linking volatility and performance. The investor can also learn which assets should be changed in their weight to optimize the returns.

At the end, investors have a helpful tool to adjust their portfolio and adapt their assets to the changing market. What are the main advantages of this tool? Well, first of all, it lets combine different risk limits (volatilities) with different terms of expected returns. The result is that the investor can choose amongst different possibilities depending his or her interests or circumstances.

Secondly, it is helpful to discover correlated and non-correlated assets. With this information, the investor can reduce the risks and maximize the returns. Moreover, the tool lets the investor decide about which positions should be enlarged and which should be reduced to obtain the targeted performance.

To sum up, T-Advisor Optimizer is an easy visual tool that reports the investor about the changes to be done in the portfolio to get the best results. The main advantage is that the tool has different settings available so that the investor can choose which one fix to their particular requirements: the freedom in one click.