The ‘Equity’ section provides an in-depth analysis of your portfolio's equity segment, covering performance, diversification, benchmark comparisons, and risk metrics. It gives a comprehensive overview to help you make informed buy and sell decisions based on the current health of your investments.
This section includes the following key aspects:
Summary
Portfolio Checklist
Performance
Diversification
Benchmarking
Risk Analysis
Events Calendar
Deep Dive
Summary:
A comprehensive overview of your equity portfolio’s performance, covering various aspects such as daily insights, portfolio score, performance summary, and key risk and return metrics.
- Portfolio Score:
This score represents the weighted average of Trendlyne’s Durability, Valuation, and Momentum scores for the stocks in your portfolio. Durability measures a company’s financial health, Valuation assesses pricing based on metrics like P/E and P/BV, and Momentum reflects market interest, signaling potential trends.
- Portfolio Overview:
A snapshot of your portfolio's daily performance, highlighting metrics like 1-day gain, unrealized P&L, current value, and invested amount.
- Performance Summary:
An analysis of your equity investments, including total investment, unrealized profit or loss, and the percentage gain or loss.
- Diversification Summary:
Provides insights into how your equity portfolio is spread across different stocks, sectors, and market capitalization.
- Benchmarking Summary:
Compares your equity portfolio’s performance, valuation, and growth with the benchmark Nifty 50 index.
- Risk Analysis Summary:
Evaluates the risk and volatility of stocks in your equity portfolio.
Portfolio Checklist:
- Portfolio Score:
The portfolio score represents the weighted average of Trendlyne’s Durability, Valuation, and Momentum scores, providing a combined assessment of the overall health of your portfolio stocks.
- Over-Diversification:
Achieving the right balance in diversification is vital to managing market risk and volatility. Investing in more than 20 stocks may reduce potential returns while offering only marginal risk mitigation.
- Under-Diversification - Sector:
Diversification across various sectors is key to effective risk management. An ideal portfolio ensures that no single sector exceeds 30% of the total investment, minimizing exposure to sector-specific risks.
- Under-Diversification - Stock:
Concentrating more than 20% of your portfolio in a single stock can lead to under-diversification, increasing the risk of significant losses from the poor performance of that stock.
- ASM/GSM Stocks:
ASM (Additional Surveillance Measure): Stocks under ASM are monitored by exchanges to control volatility and speculative trading, maintaining market stability.
GSM (Graded Surveillance Measure): GSM stocks are subject to stricter restrictions due to financial instability or elevated risks, protecting investors from potential losses.
- Liquidity
Assess whether any stocks in your portfolio are classified as illiquid. Illiquid stocks with low trading volumes can pose challenges when selling, potentially resulting in financial losses.
Performance:
This section provides a comprehensive breakdown of your portfolio’s performance, covering various aspects such as overall portfolio performance, profit and loss by market cap, stock-wise performance, sector-wise performance, and share price performance.
- Portfolio Performance:
View a summary of your portfolio's performance, including the total invested amount, unrealized profit and loss, and overall gain or loss percentage.
- Profit & Loss by Market Cap:
Analyze a heatmap that segments your portfolio's gains and losses by market capitalization (large-cap, mid-cap, small-cap). This helps identify which segments are performing well and the proportion of unrealized gains or losses in each.
- Stock-Wise Performance:
Evaluate individual stock performance within your portfolio. This includes a breakdown of profit and loss by stock, highlighting the top-performing stocks and the percentage of unrealized gains or losses. You can also assess the profit and loss based on return on investment (ROI).
- Sector-Wise Performance:
Review your portfolio's performance categorized by sector. This section helps identify the best-performing sectors and provides the percentage of unrealized gains or losses in each sector.
- Share Price Performance:
Gain insights into how your portfolio stocks have historically performed over different timeframes, such as daily, monthly, and yearly. This analysis is based on share price trends and does not consider your purchase price or date.
Diversification
This section provides a detailed analysis of how diversified your equity portfolio is, offering insights into stock distribution, investment style, sector distribution, and market capitalization distribution.
- Stock Distribution:
View a pie chart illustrating the allocation of your portfolio across different stocks. Balanced diversification helps manage market risk and volatility, achieved by investing in a mix of stocks from various sectors and market caps. However, excessive diversification may reduce potential returns more than it mitigates risks.
- Investment Style:
Understand your investment approach—whether you lean towards growth, value, or a combination of both.
Growth Stocks: Stocks with high revenue or profit growth over the past three years.
Value Stocks: Stocks with a P/E ratio below 20 or a PEG ratio between 0 and 1. Your style may also reflect a blend of these approaches.
- Sector Distribution:
Analyze how your investments are spread across different sectors. A well-diversified portfolio includes stocks from multiple industries to minimize exposure to sector-specific risks.
- Market Cap Distribution:
Examine the allocation of your portfolio among large-cap, mid-cap, and small-cap stocks.
Large-cap and mid-cap stocks: Generally less risky and stable.
Small-cap stocks: Offer higher growth potential but come with increased risk.
Benchmarking:
This section lets you compare your portfolio's performance and valuation metrics against benchmarks like the Nifty 50 index.
- Valuation Metrics:
Evaluate your portfolio's valuation using key ratios such as:
Price-to-Earnings (P/E): Compares your portfolio's earnings multiples to the Nifty 50.
Price-to-Book (P/B): Assesses how your portfolio’s book value compares to the benchmark index.
- Growth Metrics:
Analyze the weighted average profit growth of your portfolio stocks relative to the Nifty 50. This helps determine whether your portfolio is outperforming or underperforming the benchmark in terms of financial growth.
- Other Financial Ratios:
Price/Earnings-to-Growth (PEG) Ratio: Calculates the ratio of P/E to expected earnings growth. A PEG ratio below 1 often indicates undervaluation.
Dividend Yield: Shows the annual dividend payments of your stocks as a percentage of their current prices, providing insights into income generation.
Risk Analysis:
This section evaluates the key risk and return metrics of your portfolio over various timeframes, such as 1 month, 3 months, and 1 year, providing actionable insights into its risk profile.
- Liquidity Check:
Analyzes the illiquidity percentage in your portfolio, indicating the proportion of holdings that may be difficult to sell due to low trading volumes. These stocks pose a risk of potential losses during liquidation.
- Beta (β):
Measures your portfolio's volatility compared to the Nifty 50 index:
Beta > 1: Higher volatility than the Nifty 50.
Beta < 1: Lower volatility than the benchmark.
Note: Even with a lower beta, your portfolio might have a higher total risk due to firm-specific risks, which combine with systematic risks to determine overall risk.
- Standard Deviation:
Indicates the variability of investment returns in your portfolio:
High Standard Deviation: Greater risk with volatile returns.
Low Standard Deviation: Lower risk with more consistent returns.
- Sharpe Ratio:
Assesses risk-adjusted returns by evaluating whether the excess returns justify the risks taken:
Sharpe Ratio > 1: Good.
Sharpe Ratio > 2: Very good.
Sharpe Ratio > 3: Excellent.
- Value at Risk (VaR):
Estimates the potential loss in your portfolio under normal market conditions over a specified period. VaR provides a quantifiable measure of downside risk to help gauge potential investment losses.
Events Calendar:
The Portfolio Calendar helps you stay updated on key corporate actions and announcements related to the stocks in your portfolio. It provides a comprehensive overview of key events such as Dividends, Bonuses, Splits and other corporate actions.