# Portfolio Management Platform Introduces Risk-Adjusted Return Calculator

Charlotte, NC (PressExposure) September 09, 2009 -- Alpha Theoryâ„¢ recently introduced the first ever calculator that produces an Estimated Risk Adjusted Return for any individual asset.Â  This value lays the groundwork for every important portfolio decision an investment firm will make. The Risk-Adjusted Return calculation is the most effective way to measure investment quality. All research can be distilled down into the elements of potential profit, downside risk, and probability of each coming true. The use of Risk-Adjusted Return in portfolio construction reduces risk by decreasing position size when an asset has greater downside and increasing return by maximizing the portfolioâ€™s overall Risk-Adjusted Return.

The Alpha Theoryâ„¢ Risk-Adjusted Return (RAR) calculator can be found at http://www.AlphaTheory.com/Calculator. Begin by entering a stock ticker, the calculator provides an Estimated Risk-Adjusted Return using market metrics that you can use to show if the market-bias is positive or negative. This Estimated RAR starts by deriving price targets using an average of 52-week high and low and 1-year annualized volatility implied prices. Then, the Calculator derives probabilities by averaging the option-market implied and normal distribution implied probabilities of the price targets being achieved (for more detail on these calculations click on the Calculator Instructions at http://www.AlphaTheory.com/Calculator). The Alpha Theoryâ„¢ Estimated RAR is a great first step in any investment process.

The next step is to customize with your own research. Alpha Theoryâ„¢ allows you to override the estimates with your own assumptions to truly appreciate the stockâ€™s impact on your portfolio. Risk-Adjusted Return is the foundation of every investment decision and is imperative in ensuring that an assetâ€™s position size is in-line with your fundamental research.

â€œCalculating Risk-Adjusted Return is the most important step a firm can take to improve their investment process,â€ says Cameron Hight, President and CEO of Alpha Theoryâ„¢. â€œThe hard part is getting started and the Alpha Theoryâ„¢ Calculator makes it much easier by providing the foundation of our ground-breaking application to the entire investment community.â€

Alpha Theoryâ„¢, the investment industryâ€™s leading Fundamental Portfolio Management Platform, is the premier solution used by hedge and mutual fund portfolio managers to develop an efficient portfolio using the concept of risk-adjusted return. Alpha Theoryâ„¢ leverages research and instinct to build a repeatable system for ensuring that position size matches the firmâ€™s estimate of idea quality. For further information, please visit http://www.AlphaTheory.com, our blog at blog.AlphaTheory.com or our demo at http://www.AlphaTheory.com/demo.

Press Contact:
Telitha Causey
Vice President, Marketing
Alpha Theoryâ„¢
Charlotte, NC
phone: (704) 307-2914 x207
fax: (877) 854-7489
tcausey@AlphaTheory.com
http://www.AlphaTheory.com

Press Release Source: http://PressExposure.com/PR/Alpha_Theory™.html

Press Release Submitted On: September 09, 2009 at 4:13 am