New Feature: What-if Analysis

Posted: Mar. 20, 2017 -

Most money managers currently lack an efficient way to test the impact of new trades prior to executing them. The various systems available in the market are large deployments that were not designed for these type of on-the-flight, exploratory analytics.

Thus, if you want to quickly test how the addition of those SPY put contracts might affect the portfolio downside in a market shock, as a for instance, you might be out of luck.

In what follows we will show how what-if analysis can be performed effortlessly in Everysk Dashboards, in just 3 steps:

Step 1: Create a clone of the portfolio

In My Portfolios tab, drag and drop the portfolio you are interested to perform what-if analysis to the central panel. Then, in the right panel, you will see a new icon to create the clone:

Step 2: Edit the clone

When you click the button from Step 1, an editor with all properties and positions will open (see figure below):

Here you can quickly change many properties of the original portfolio, such as name, date, base currency and net asset value. Additionally, you can easily modify the contents of the original portfolio as follows:

To remove positions, just select them and click on the trash icon at the end of the list. To change a position quantity, just edit the Contracts/Shares field(s) To add a new position, just click on the button +Add Position

The image above illustrates a portfolio with 100 shares of Apple and 100 shares of Facebook that has been cloned. A new hedge was added to the portfolio, consisting of 1 at-the-money put option on SPY.

Step 3: Compare Original and Clone

Finally you can superimpose the original and clone with a template such as Stress Test Comparison

The unhedged portfolio is the light green and the portfolio with the put option is the dark green. Portfolio/Wealth managers can quickly ascertain the expected behavior of the trade just before executing it. All the process takes a few seconds from beginning to end.