Portfolio Analysis Software

A large number of financial assets are traded in the international financial market. Investors choose financial instruments for portfolio investments in accordance to their trading strategies and in relation to the allowed risk. Modern portfolio theory provides theoretical basis for creating portfolios, known as portfolio optimization.

Portfolio optimization includes a probabilistic assessment of the behavior of assets and selection of the most appropriate assets in accordance with the investor’s preferences. This process is quite complex in terms of calculation and requires application of modern information technologies. Thus, the modern investment industry depends on the software, through which analysis of portfolio and its optimization is performed.

Portfolio Analysis Software

Portfolio analysis software is a programming package developed for practical implementation of portfolio analysis. It is an analytical tool that helps investors to find the adequate asset allocation for their investment portfolios in the framework of modern portfolio theory and according to their risk preferences. The software analyzes portfolio risks based on historical data of constituent assets, which is used as a basis for estimating the future behavior of the assets. In this framework risk is defined as the variance (or standard deviation) of portfolio returns. Thus, portfolio optimization is achieved in the process of defining the optimal asset group which maximizes the profitability of the portfolio and minimizes the level of risk.

Trading Platforms

Many modern trading platforms are equipped with analytical tools that allow investors to carry out analysis of the instruments, the portfolio itself and estimate its security. Besides relatively simple solutions such as calculation of the risk/profit ratio, developers have also designed software packages for analyzing portfolios of various complexity. These packages allow estimating portfolio risks from many points of view, for example, Cost risk measure (VaR), probability of a deficit, as well as support alternative asset allocation models such as Black-Litterman.

IFC Markets provides investors worldwide with trading platforms NetTradeX and Metatrader 4. The unique opportunity of creating investment portfolios - Personal Composite Instruments (PCI) is realized on NetTradeX trading platform. This technology enables the investors to create portfolios of varying complexity – from very simple ones consisting of only of couple of instruments to complex structures composed of dozens of assets from various categories. The instruments can be selected from four broad categories – currencies, precious metals, CFDs on stocks, commodities and indices. The software calculates the PCI quotes by the quotations of its components and build charts of this instrument for a deep history. By this way the investor can study the PCI behavior and develop the relevant trading strategies based on revealed regularities.

The access to historical data for the most of assets and versatile analytical tools make NetTradeX trading platform an ideal program for calculating and realizing investment strategies. As the portfolio analysis software calculates the risk/profit ratio of the investment portfolio, investors have an opportunity to reduce or eliminate risks inconsistent with their investment goals. Analytical instruments help to estimate the volume of the funds invested in various assets. Through the portfolio analysis software allows estimating the assets through analyzing their historical behavior and their contribution to portfolio variance. Such risk analysis provides an opportunity to pick stocks that contribute to portfolio optimization, increase portfolio effectiveness and reduce the volatility.

IFC Markets is a leading innovative financial company, offering private and corporate investors wide set of trading and analytical tools. The company provides its clients with Forex and CFD trading through its own-generated trading platform NetTradeX, which is available on PC, iOS, Android and Windows Mobile. The company also offers MetaTrader 4 platform available on PC, Mac OS, iOS and Android. You may compare the advantages of both platforms.