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Disclosures for Performance Metrics and Simulations Performance Metrics

This section discusses on the assumptions and details on how Performance Metrics are calculated

 

Broad Assumptions of all Performance Metrics and simulations for all stocks and portfolios

All performance metrics are not specific to an individual user but are simulation (hypothetical returns) of the historic recommendations  with the following facts and general assumptions for both stocks and portfolios:

  1. All historic data for stocks is obtained from Xignite Inc.

  2. All performance evaluation, which includes key metrics defined above (cumulative returns, Annualized returns, annual volatility, Sharpe ratio, etc) considers the "BUY" price to be the price at the "Close" of the market on the previous day or the last close price of the stock. However, the “BUY” price for the stock may not be available the next day if the “open price” of the stock has gone up or down. Further, even if market opens for the stock at the mentioned  “BUY” price, such price may not be available for a large volume of “BUY” for a user for the next day.

  3. Similarly, all performance evaluation which includes key metrics defined above (cumulative returns, Annualized returns, annual volatility, Sharpe ratio, etc) considers the "SELL" price to be the price of "Close" on the previous day or the last close price of the stock. However, that price might not be available for Selling the stock next day as on the next day the “open price” of the stock might have gone up or down. Further, even if market opens at the mentioned price for “SELL”, that price might not be available for a large volume of “SELL” for a user for the next day.

  4. The term “returns” used in describing metrics may be either a profit or loss

  5. The price used for the stock for metric calculation in the simulation assumes that price is available for either “BUYing” or “SELLing” of a stock and doesn’t take into consideration large volume of transactions for such stock

  6. The simulated performance metric uses January 1, 2016 as the starting date to capture all metrics including recommendation starts both for the stock (the stock chart and returns calculation and for star rating considerations for the stock) and the portfolio evaluation using the above mentioned metrics for the simulated portfolio ratio and returns consideration

  7. This date January 1, 2016, which is considered for all metrics and returns is a date chosen to show at least a few years of historic consideration for the simulation.

  8. All ratios and performance metrics for stocks (such as compounded return, average profit, avg-invested-days, unrealized profits, etc) and portfolios (such as cumulative returns, annualized returns, annual volatility, sharpe ratio, etc) do not take into account taxes for short term or long term gains, cost of buying and selling stocks (the deduction of brokerage or other commissions, and any other expenses that a client would have paid or actually paid) or dividends paid (or reinvestment of the dividends and other earnings) in between which would mean the actual returns would be much lesser or more (in consideration of dividends) than shown in simulation.

  9. The performance metrics of the simulation is to be taken as only directionally representative of past performance and not represent actual trading returns or future performance

  10. Specific to portfolios, if a portfolio is built with 10 stocks chosen, either through a custom user selection of stocks or a stock screener (a stock search tool in Upturn app to search and filter stocks based on Upturn Star rating, cumulative returns, stock price, etc), for all its calculations, for the simulation it is considered the portfolio is equally weighted. That is, all stocks are invested with equal capital. For simplicity of explanation, consider two stocks A and B in the portfolio, if price of stock A is 100 and price of stock B is 10 to start with, equal weighted would mean for every 1 stock of A, 10 stocks of B are bought to start with, and for simplicity this is implemented by taking percentage of daily returns (changes in percentage of every stock movement on a daily basis) divided by the number of stocks in the portfolio

  11. Specific to portfolios, similarly as above, SPY (SPDR S&P 500 ETF Trust) is taken as the benchmark to compare and the percentage of daily returns (changes in percentage of stock price movement on a daily basis) of SPY is taken into consideration

  12. As noted above, users might not build a portfolio which is equally weighted and for a given principal it might not be possible to create an equally weighted portfolio (stock prices could be different with few stocks in hundreds of dollars and few in tens and others in thousands) and all the metrics of the simulation considers an equally weighted portfolio for the sake of simplicity.

  13. The portfolio simulations considers executing on the “BUY” and “SELL” recommendation by Upturn on the stocks in the portfolio for its respective personas. The “BUY” price and “SELL” price considered for the simulations follow the above assumptions mentioned. These prices for “BUY” and “SELL” might not be available the next day for a user to actually “BUY” or “SELL” the stock at.

© 2020 Upturn Corp.

 

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