What is the Relative Score and how is it used in Portfolio Optimization?
Relative Score is a number between 0 and 100, representing performance of a portfolio in a given category, as compared to other investors” scores. The Relative Score Diagram presents your position in a given performance category in contrast to the average positions of all registered investors. For example, if your score is in the middle of the bar, you are performing as an average investor in that category. As your score increase or decreases you move towards either end of the bar. For the risk bar, your objective is to stay close to the left side; for all other categories your objective is to move as far to the right as possible. The score of 0 means that your portfolio either generates negative expected return or performs very poorly. Please Note that we use a ‘naive’ approach to determine the relative score of the portfolio. Since most investors use various time horizons, have different tolerance for risk, and hold different number of securities from different industries, you have t
