Historical Analysis

The Historical Analysis tab of the Portfolio Analyzer helps investors evaluate a stock’s past financial conditions and their impact on future price movements. By analyzing up to 10 years of historical data, this tool identifies the probability and magnitude of potential stock price changes based on ERS’s proprietary risk ratings.

  • The Probability Table provides insights into how the stock performed when assigned each risk rating, offering average returns, gains, losses, and success rates for different rating levels.
  • The Price Chart visually tracks the stock’s performance over time, allowing users to hover and view the risk rating at various points in history.

This data-driven approach helps investors identify periods when the stock had a higher probability of gains, aiding in more informed investment decisions.

The summary area of the Historical Analysis provides a quick snapshot of a stock’s risk rating and historical performance, displayed on a color gradient ranging from red (high risk) to green (low risk).

  1. Letter Rating and Best Metric: Displays the stock’s letter rating (A+ to F), with A+ being the best. The metric used to determine this rating is identified (e.g., Equity Risk indicator™ (ERI)).
  2. Numeric Rating: Indicates the stock’s risk rating on a scale from 0 (best) to 100 (worst), providing a quantitative measure of its investment quality (e.g., ERI: 36).
  3. Price: Shows the current market price of the stock (e.g., $697.30).
  4. Historical Analysis Summary: ERS’s Historical Analysis evaluates past financial conditions to help investors make informed decisions by identifying patterns that have consistently led to gains while minimizing the risk of significant losses.

This table shows the historical probability and performance metrics for the selected stock, organized by its past ratings (A+ to F). It provides insights into the number of days the stock held each rating, average returns, gains, losses, and probabilities of success over different holding periods (6 months, 1 year, or 2 years).

  1. Holding Period Selector: These buttons allow the user to switch between 6-month, 1-year, or 2-year return studies, changing the holding period for the historical performance analysis.
  2. Rating Identifier: Displays the letter-grade rating (A+ to F) for each row, indicating the stock’s historical risk level during those periods.
  3. Days at Rating: The total number of trading days when the stock was assigned each specific rating.
  4. Average Return: The average 1-year return if an investor had invested $10,000 in the stock on each day it held that rating and held each investment for exactly 1 year.
  5. Average Gain: The average return for all investments that resulted in gains, calculated using the same rules as (11).
  6. Average Loss: The average return for all investments that resulted in losses, calculated using the same rules as (11).
  7. Probability of Gain: The percentage of 1-year investments made on days when the stock held this rating that resulted in a gain.

At the bottom of the page is a price chart showing the historical price performance of the selected stock over the past 1, 3, 5, or 10 years.

  1. These buttons allow the user to switch between a 1-year, 3-year, 5-year or 10-year view of the stock’s price history.
  2. When the user hovers their mouse over the chart, a tooltip appears displaying the price and rating of the stock at the corresponding date. This provides an interactive way to analyze the stock’s price movements and its associated ratings over time.