Analysis
Methodology
Complete documentation of all calculations, theories, and recommendation frameworks used in Alphalens Portfolio Analyzer.
Basic Portfolio Metrics & Calculations
Fundamental metrics used to track portfolio performance.
Investment Value
Total amount invested at the time of purchase.
Buy Price × QuantityCurrent Value
Present market value based on live/delayed prices.
Current Price × QuantityAbsolute Gain/Loss
The rupee amount of profit or loss.
Current Value - Investment ValuePercentage Gain/Loss
Return on investment relative to size.
(Gain/Loss ÷ Investment) × 100All-Time High (ATH) Since Purchase
The highest price a stock reached since the buy date. Potential Gain from ATH measures missed profit-taking opportunities.
((ATH - Buy Price) ÷ Buy Price) × 100Sector & Category Analysis
Frameworks for analyzing diversification and market capitalization exposure.
Market Cap Categories
Ideal Diversification
Benchmark Comparison Methodology
Alpha (Outperformance)
Measures performance relative to the market. Uses trailing 1-year returns.
Portfolio Return % - Benchmark Return %Outperforming the market
Underperforming (consider index fund)
Benchmarks Used
Value Investing Framework
Based on Benjamin Graham/Warren Buffett philosophy: buying assets below intrinsic value.
Score Interpretation
Growth Investing Framework
Focuses on companies with strong revenue and earnings potential.
Score Interpretation
Recommendation Engine Logic
Combines Value and Growth perspectives into a final action plan.
Combined Score Formula
(Value Action Score + Growth Action Score) ÷ 2Action Scores: BUY=2, HOLD=1, SELL=0
Portfolio Health Score
A composite metric evaluating four key dimensions (0-100 scale).
Rebalancing Strategy
Rebalancing Triggers
- Sector exceeds 35% allocation
- Single stock exceeds 20% allocation
- Multiple stocks with losses > 25%
Rebalancing Actions
- • Sector > 35%: Reduce to ≤ 30%
- • Stock > 20%: Trim to ≤ 15%
- • Value Style: Average down on quality; trim winners
- • Growth Style: Cut losers quickly; let winners run
Risk Metrics
Correlation Matrix
Range -1 to +1. Aim for average correlation < 0.5 for diversification benefits.
Annualized Volatility
Daily Volatility × √252. Measures price swing risks.
Max Drawdown
Largest percentage drop from peak to trough.
Advanced Portfolio Metrics
Institutional-grade analysis across 10 layers.
Structural Diagnostics
Thematic clusters and industry concentration checks
Style Analysis
Value Tilt vs. Growth Tilt percentage calculation
Concentration Risk
Flags if Top 3 stocks constitute > 50% of portfolio
Risk-Adjusted Returns
Sortino Ratio and Beta calculations
Behavior Analysis
Patient Investor (>365 days) vs. High Churn (<90 days)
Drift Analysis
Alignment Score (0-100) comparing sector weights against Nifty 50
Overlap Detection
Identifies duplicate exposure via business groups
Liquidity Risk
High risk if > 5 days to liquidate position
Macro Sensitivity
Interest rates, Crude Oil, Currency impact tracking
Scenario Analysis
Stress tests: Nifty falls 10%, Banking drops 15%
Dividend Yield Metrics
Portfolio Dividend Yield
Weighted average yield of all holdings
Σ(Stock Yield × Stock Weight)Tax Implication Metrics
Union Budget 2024 rates
Short-Term Gains (STCG)
20%Stocks held < 12 months
Long-Term Gains (LTCG)
12.5%Stocks held ≥ 12 months. Exemption: ₹1.25 Lakh/year
Other Costs
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