Unraveling Return Analysis in Portfolio Management

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 ...
    • What does 'Beta Analysis' mean in FYERS 2.0 App?

      The Beta is the measure of a stock’s volatility against the index. Beta Analysis provides the how volatile is the stock compared to the index. Let's say, the Beta of the Nifty50 Index is 1.00. If the beta of ‘X Ltd.’ is 0.50 then the price of X Ltd. ...
    • What chart timeframes can I use on FYERS for technical analysis?

      FYERS offers an extensive selection of chart timeframes to cater to various trading strategies and preferences. These include: Seconds: For the most granular analysis, select from 5, 10, 15, 30, and 45 seconds. Ideal for those engaging in ...
    • Can I view charts or perform deeper analysis from screener results?

      Yes, once FIA gives you a list of matching stocks, you can instantly open the chart for any stock right from the screener results. This lets you validate the setup before placing a trade—without switching tools or platforms. It’s designed to keep ...
    • What does Fundamentals & Research mean in the FYERS 2.0 App?

      The ‘Fundamental and Research’ option in the 2.0 app provides the data based on the fundamentals analysis of a listed company. For instance, the fundamental analysis of Indian Oil Corporation Limited is displayed in the image below: The Fundamentals ...