What is Return Analysis?

Return analysis is an integral component of the Portfolio Analyser Report, designed to calculate optimum returns of your portfolio holdings and associated risks.

How is it calculated?

1. Risk: This is quantified as a 3-year standard deviation of return.
2. Return: This is determined as a 3-year mean return.
   

Understanding the Risk/Return Plot:

1. The numbers on the plot represent holdings from the top 10 portfolio holdings list.
2. Risk/return analysis is demonstrated based on each holding's risk and return over the past three years.
   

Points to be remembered as per the above chart:

1. The horizontal axis signifies the last three years' standard deviation, while the vertical axis represents the mean of three years.
2. Underlying holdings include the top 10 portfolio holdings.
3. The Benchmark indicates the optimal risk and return based on the past three years.
4. The term 'Portfolio' embodies the overall performance as per the return analysis.
   

A high standard deviation for a stock implies it is risky, and a high mean indicates a higher return. Conversely, a low standard deviation denotes lower risk, and a low mean signifies a lower return.

For instance, if the benchmark according to the portfolio analyzer is 19.94, and stock 1 displays a Mean of 25 and a Standard Deviation of 37, it indicates that, although stock 1 has outperformed the benchmark in terms of mean returns over the last three years, its high standard deviation also makes it highly volatile and risky.

• Related Articles

• What is meant by Technical Analysis?

  The purpose of technical analysis is to evaluate assets and identify trading opportunities based on historical data and statistical trends gathered from trading activity, such as price movement and volume. Unlike fundamental analysis, which focuses ...

• Does FIA Store My Commands or Analysis History?

  Yes. FIA automatically saves everything related to your interaction with it, so you can come back and review previous insights whenever needed. FIA typically stores the following: Your commands: All queries and instructions you enter in FIA. FIA’s ...

• How can SWOT and QVT be used for analysis on FYERS?

  The option provides a company's SWOT chart and QVT analysis based on the financials and macro factors of the industry it operates in. SWOT chart: SWOT means Strengths Weaknesses Opportunities Threats. The SWOT analysis helps in evaluating a company's ...

• Can I view charts or perform deeper analysis from screener results?

  Yes. Once FIA shows a list of matching stocks, you can open the chart instantly for any stock directly from the screener results. This helps you validate the setup before placing a trade—without switching tools or platforms. The flow is designed to ...

• Which parameters are most useful for sector analysis?

  Use three simple lenses to judge sectors: Return % (how much it moved), Market Cap (how big it is), and Volatility (how steady it is). On the market-level Sector heatmap, you can switch the Return % period and see block size by sector weight. To ...