Portfolio management is a complex and strategic financial function. It requires making information-driven decisions, matching investments with financial objectives, and reducing monetary risk by diversifying investments.
A portfolio analysis studies the investment portfolio to determine its appropriateness for an investor's needs, preferences, and resources.
Investors visualize data to:
A portfolio’s overall performance is impacted by a number of external factors. KPIs are a selection of the most important, quantifiable metrics used to measure key aspects of your portfolio. They allow you to track the value of various investments and observe how they respond to changes in volatile markets.
Some KPIs incorporate a bundle of metrics. Examples include allocation, yield cost ratio, annual dividends, and unrealized gains.
Business intelligence tools allow investors and managers to customize dashboards with visualizations catered to the specific industry, fund type, or performance goals.
Data visualizations also allow investors to drill down metrics to better understand specific industry trends in different sectors over various periods of time. Visualizing patterns relative to certain variables and corresponding fluctuation helps investors make sound decisions, and gain insight into short- and long-term market trends.
Wyn Enterprise Finance Dashboard - Sector Performance Portfolio
Use the year slicer above to observe how the portfolio performed in the given years. A portfolio summary section on the left displays important key performance indicators (KPIs) that give an investor a clear picture of their stocks' performance.
Selecting the proper KPIs allows investors to set long-term financial goals and intermediate targets to measure progress.
The annual measure of returns on investments. The value displays the profits and losses yielded on the total stocks purchased. Portfolio value is determined by data pulled from several financial sources.
Yield Cost Ratio
A positive and growing ratio indicates sound investments with growing dividends. This ratio is calculated by dividing the annual dividend by the original purchase price of a single share.
For example, if an investor buys shares of ABC for $10 per share, and ABC pays a $1 annual dividend, then the yield on cost is $1 / $10 = 10%.
As an investor, it is important to keep track of over-investment or under-investment in a given sector. Such a portfolio may require rebalancing.
A treemap visualization that displays quantities of stocks for a category, represented by area size.
Dividends vs Unrealized Gains
The bar chart displays the relationship between dividend yield and unrealized gains/losses.
An unrealized gain or loss shows when the value of the stock increases or decreases after being purchased, but before the investor sells the stock. In other words, it is a profit or loss that exists only on paper.
Taking the below example, if ABC's stock price drops to $3 per share, the investor experiences an unrealized loss of $7 per share, but the stock has not been sold. Let's presume that now the price of the stock soars to $18 per share. Since the shares have not yet been sold, the investor has an unrealized gain of $8 per share.
The most important items to look at in this particular chart are those which provide high dividends and low unrealized gains and vice versa. The portfolio manager then makes an informed decision to either sit on a pile of unrealized gains/losses or buy/sell the stock to help rebalance the number of shares with greater yield.
Diversity is fundamental to a successful portfolio, and understanding how the pieces fit together is equally important. The treemap visualization shows clearly that this investor’s portfolio has the highest quantity of stock in the technology sector, the largest block. When these sectors are further broken out, it is possible to contextualize short-term fluctuations within historical trends. This helps investors implement and maintain a viable long-term plan.
Interactive dashboards let investors compare multiple data sets across sectors, countries, growth type, and risk type. Combining graphical representations of several data sets lets users simplify comparative analysis and find different patterns and predictive economic indicators.
Sector Summary Tables
The Sector Summary table presents figures for financial advisors and portfolio managers. The table provides high-level visual indicators that help investors identify sectors with good or bad yields. Based on these numbers, the portfolio stakeholder(s) can do external research into specific sectors and gain better insight to advise their investments.
The data used in this table can be pulled into dynamic stock charts that provide users with information on any publicly-traded company within a specific sector.
The ability to examine individual companies for potential gains and losses allows investors a more granular view of their portfolio and may help them determine how to invest within various sectors.
Sector Summary Table
This pie chart shows how investments are allocated across locations. Investors can monitor how much of their money is tied to a particular economy and adjust accordingly.
Dashboards also let users compare investment performance in established and emerging markets and use those numbers to inform their own geographical allocation. These features used in combination allow investors to prepare for changes in the global economy.
An investment-style box is a method that categorizes the stock on the basis of market capitalization and valuation. This chart helps the investor evaluate the diversification of a portfolio, and balance between the potential risk and return. For example, large-cap and blendstocks tend to be less volatile, and therefore less risky.
Conversely, small-cap and growth stocks carry greater risk as a result of higher volatility.
The horizontal axis on this chart reflects the market cap. The vertical axis categorizes the stock by valuation.
Balancing risk types is an important subset of allocation. Visualizing this data alongside other diversification indicators allows users to better assess risk across different sectors.
Managing, maintaining, and tracking your portfolio can be overwhelming. Data tells a clear story. Combining data into comprehensive visualizations in a single location can provide new insights into your investments.
Wyn is a web-based BI and data analytics platform that provides greater insight into your data.
Wyn offers built-in tools for report and dashboard creation, data governance, security integration, embedded BI, automated document distribution, and a business-user friendly interface for self-service business intelligence.