Sunday 20 October 2013

Rating the Resilience and Complexity of Stock Portfolios



Assetdyne offers a unique service which enables users to measure the complexity and resilience of stock portfolios in real-time. The Assetdyne portal is connected to stock markets and makes portfolio building very simple: it is sufficient to type the Ticker symbol of a security and "Add to Portfolio". Once a portfolio has been built and stored one may evaluate its complexity and resilience by simply clicking on the "Analyze" icon as illustrated in the image below.




By clicking on the "analyze" icon as indicated by the blue arrow, the system performs an analysis of the Dow Jones Industrial Average Index based on the "Close" values of the securities which compose the index. These are listed in the "Ticker Symbols" column above. Once the analysis has been completed, the system pops-up a window with an interactive Business Structure Map (or Complexity Map) of the portfolio. This is shown below.



The Assetdyne system may be used not only to analyze actual stock portfolios but also sectors of the industry. The above list shows sectors such as Oil & Gas, IT, Automotive, Banks, etc. Based on how the corresponding stocks evolve, the system provides a  reflection of an entire industry sector based on its complexity and resilience.

But why are complexity and resilience so important? This is why:

High complexity means difficulty in terms of understanding the dynamics of a system, to make forecasts, more fragility, higher likelihood of surprising behaviour, more turbulence.

Resilience, the opposite to fragility, is the most important feature a system (portfolio) needs in order to survive turbulence and high complexity of markets and of the economy in general. And today's markets and economy are extremely turbulent and dominated by uncertainty.

Some examples.

         




www.ontonix.com                www.assetdyne.com




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