One point more
What another percentage point of this holding would do to your volatility.
In the demo portfolio
+49 bp
How it is computed here
The derivative of portfolio volatility with respect to that weight, converted into basis points per point of weight.
Worked example
- Add one point of weight to HLX, taking it evenly from the rest: portfolio volatility changes by about +49 basis points.
- A basis point is 0.01%. The holding with the largest number is the one to trim first if the goal is less risk.
Demo portfolio: four invented companies, generated prices, measured by the real engine. Past returns do not predict future ones.
Where it misleads
It is a local figure, true for a small change. It does not describe what doubling the position would do, because the correlations shift as the weights do.