Print the Difference?

[John Gregory]

A summary worksheet contains two graphs of stock performance; two teams
competing agains one another.

Under each is given the % change in the total portfolio from the last
report. I'd like to add a statement emphasizing how much better ( %) one
team did over the other. What function would I use?

Example: Team A lost 25% of it's portfolio. Team B lost 15% of it's
portfolio. Team B is doing 40% better than Team A [(-25)-(-15)
= -10. -10/-25 = 40] ... albeit still loosing their shirts!

 

[Kevin Stecyk]

John Gregory wrote...

A summary worksheet contains two graphs of stock performance; two teams
competing agains one another.

Under each is given the % change in the total portfolio from the last
report. I'd like to add a statement emphasizing how much better ( %) one
team did over the other. What function would I use?

Example: Team A lost 25% of it's portfolio. Team B lost 15% of it's
portfolio. Team B is doing 40% better than Team A [(-25)-(-15)
= -10. -10/-25 = 40] ... albeit still loosing their shirts!

John,

One could and many have written theses on this topic.

I wouldn't use your math the way you have.

Say for example, on a portfolio of a $1 million,

Team A finished with 1,000,001 (0.0001%)
Team B finished with 1,000,000 (0%)

Using your math, Team A did 100% better than Team B? Not in my books.

As an alternative, assuming both Teams started with the same initial
capital, then I would simply take the finishing amounts each team possessed.

So if Team A had $1.3 million and Team B had 0.9 million (lost money), then
Team A's performance is =1.3/0.9 times better ( or 44.4%) better.

If you were a professional money manager, then you have to examine the risk
taken to arrive at this better performance. You can Google Sharpe Ratio,
Treynor Ratio and Sortino Ratio among others.

Hope this provides food for thought.

Best regards,
Kevin