Factor Analysis

For portfolio managers, it is extremely important to understand what is causing bad performance in their portfolios. If there is a draw down from a single asset, it needs to be replaced without changing the investment view. Experienced portfolio managers could isolate the problematic factor and replace the old asset with a new one that does not have the same factor. HedgeSPA’s performance universe comparison does this for you: it neutralizes the beta value to the factor so the manager can focus on stocks and other assets, experience less drawdown risk, and still have the same investment view as before.

Unlike other platforms which usually give superficial analysis and fails to analyze important factors and their effects, HedgeSPA not only determines the most important factors, but also aggregate underlying portfolio exposures to see how market factors drive returns. Our client can even select different classes and sectors to get comparable universes with our performance universe comparison function. Using this, managers can easily find companies and assets in comparable universe that are similar to the ones that are already in their portfolio.

With their knowledge of the factors that are causing problems and our service allowing them to search for companies without such a factor, investment managers can easily maintain the same investment view without a huge drawdown risk due to a larger than expected exposure from that specific factor. Our sophisticated portfolio analytics allow our client to most accurately see the effect of a factor and will eliminate the risk by presenting alternative but similar assets that does not have the factor, thus preventing our clients from being surprised when a single factor leads to the collapse of the entire portfolio.