Verdant Analysis provides the structure to make methodical inquiries into the merits for various securities and to meaningfully monitor one's returns.
Hamilton, Ontario (PRWEB) April 30, 2012
Verdant Analysis, developer of eponymously named financial statement analysis software has added another feature to its suite of investment research tools.
Their newest implement, called the “alpha calculator,” shows the user the amount by which their actual stock returns vary from the risk-adjusted return predicted by portfolio theory. In academic circles, this difference is called the “abnormal return.” It is colloquially know as “alpha.”
“Although achieving abnormal returns is not the only desired outcome from performing investment analysis, this new tool is an important enhancement for people who are either developing their stock picking ability or want to demonstrate to others an ability to earn superior returns,” says Jennifer Cameron, CEO.
“Earning alpha consistently is a difficult thing to do. However, you can greatly improve your results when you take an analytical approach to your investment research. Verdant Analysis provides the structure to make methodical inquiries into the merits of various securities and to meaningfully monitor one’s returns,” stated investment banker Jeffry Hooke, author of Security Analysis and Business Valuation on Wall Street.
The alpha calculator resides in the company’s “Forecast” application. After a user has completed an analysis and has made a buy or sell decision, the user can optionally record it in Forecast. After the market closes, Forecast calculates the actual annualized return and projected annualized return based on a stock price predicted by the user.
Now, in addition to the security returns that are calculated each evening, the software also determines the “alpha.” Alpha is calculated by taking the difference between the stock’s actual return and the return predicted by portfolio theory. The market return is approximated by the S&P 500 for U.S. traded stocks and the S&P TSX for Canadian securities. The starting point for the return calculations is the day the Forecast is made.
The Alpha Calculator is scheduled to be launched in early May, 2012.
About Verdant Analysis
Verdant Analysis, Inc. improves the speed and quality of financial decision making by developing intuitive and powerful applications on top of a comprehensive, trust-worthy and flexible information infrastructure. The company is increasing the transparency of financial markets by lowering the cost of analysis. For more information go to http://www.verdasis.com.