What is Performance in Instrument Analysis?

Performance refers to one of the six instrument analysis tools that helps investors in performing a deeper analysis of individual stocks, ETFs, indices or investment themes. This tool compares symbols based on their monthly returns and helps investors identify patterns in performance. For example, a stock may perform well in general in the month when it’s earnings reports are published and not so well in other months. Or, a stock may deliver higher profits and higher losses on a monthly basis when compared to another stock in the same sector – indicating Beta (volatility) rather than Alpha (outperformance).

By default, the comparative performance is displayed for the S&P500 index and AAPL stock. The user has the option to select one or two symbols to compare with the S&P500 index. For example, in the chart given below, the performance of AAPL and INFY is compared, along with S&P500, which is the default benchmark.

It is observed that AAPL significantly outperformed INFY in Jul 2022, when it returned +18.86% compared to +10.37% returned by INFY during it’s best month in the last one year – Oct 2022. Specifically, AAPL returned profits in more months than INFY. Furthermore, it is interesting to note that both AAPL and INFY significantly outperform during months when quarterly/annual results were announced.

In summary, Performance is a tool that assists investors in analysing and comparing monthly performance of different instruments, sectors, or investment themes based on their monthly returns. It allows for a comprehensive assessment of profitability and highlights any patterns or trends that may be observed.

Follow these easy steps to use Alpha Builder’s tool “Performance” to compare symbols by monthly returns:

1. On the home-page, click “Alpha Builder” or select sub-menu item “ALPHA BUILDER” under the “TOOLS” head of the “PRODUCTS” menu.
2. Scroll down the page and click on “Performance“.
3. The chart displays the comparative performance of NIFTY-50 v/s NIFTY-BANK by default.
4. Click on the left-side text-box with text as “Symbol 1“, type the symbol and click on one of the presented options.
5. Now click on the hand lens icon next to the text-box.
6. The comparative performance of the selected symbol with NIFTY-50 will be displayed chartically.
7. Click on the right-side text-box with text as “Symbol 2“, type the symbol and click on one of the presented options.
8. Now click on the hand lens icon next to the text-box.
9. The comparative performance of the two selected symbols with NIFTY-50 will be displayed chartically.

Useful Links:
Sector or Theme Performance US
How to Use Alpha Builder (YouTube)