Does anyone know of a free portfolio stress testing tool?

Discussion in 'Learn how to trade or invest by asking questions' started by HenryTrades, Jan 19, 2017.

  1. HenryTrades

    HenryTrades New Member

    Does anyone know of a free portfolio stress testing tool?

    Or an equation you can use to calculate it?

    TY
     
  2. Acstudio

    Acstudio Well-Known Member won penny contest 44x won weekly contest 40x won weekly contest 41x simulator winner 20x

    Maybe...what exactly are you hoping to determine? or ...What information are you wanting to see?
     
  3. HenryTrades

    HenryTrades New Member

    For example to test my portfolio, or say 10 stocks, against the DOW if the market were to act like it did during the great recession.
     
  4. Acstudio

    Acstudio Well-Known Member won penny contest 44x won weekly contest 40x won weekly contest 41x simulator winner 20x

    K...what you are wanting to do is to Beta weight your portfolio against the DOW....if you have DOW stocks. If you have a mix you might be better against SPY. Beta weighting your portfolio against an index will give you an idea of how heavily correlated you are directionally against something else (ex. SPY, DOW etc) and give you a number called Delta which is a number that gives you an idea how much your portfolio can be expected to move for every dollar the index moves. (Delta = directional risk) The Thinkorswim platform from TDA has this Beta weighting feature so I'm guessing there are others.

    Sometimes positions offset each other ex. a position in TLT (bonds) may give you some negative Deltas vs the SPY therefore offsetting some directional risk against other positions.
     
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