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What is the portfolio mixer?

09:45, 25 April 2017 By CMC Markets

Discover our unique trading tool that allows you to create your own CFD portfolio across multiple asset types.

Video transcript

Hi there guys and welcome to this short video on having a look at the portfolio mixer in more detail. Portfolio mixer is a quite a useful tool that gives you an idea of how an aggregate basket of stocks will perform price-wise. Probably easiest to just go ahead and show it to you.

So, I've got this extra box right here that says 'please drag and drop a product to get started.' I'm going to take coffee, drag and drop it into here, and it should pop out the next part of my chart. And what you'll see right here is this is the price performance of coffee. If I then go ahead and take gold and drag and drop gold into here, it will add the aggregate performance. And if we go ahead and say a selection like West Texas Crude, add it in like so, and we finish up by adding copper into here, we'll have four products within my mix. So, from here I've got the ability to look at wider time frames, so I'm just going to go ahead and select max(imum). And what that does is give an idea of how that basket of products would have traded if I'd held them over the last eight months.

I've also got this calendar function right here to select specific dates. I can see here it's gone up 12.56 per cent and it's got a volatility metric of about 20. And if I select length chart on here, I can see all the performance metrics on here very clearly. I can see there that coffee's been the big performer right there and I can see that, oh most of them have been okay, but crude oil has not been that great. And if I select bar, well that just allows you to very easily see exactly what's gone on. I can see that kind of copper and crude oil have been bad, gold's been okay, but it's been coffee that's actually been our stellar performer.

So, if I go back to here again, you notice here that on the right-hand side I've got slight energy bars on here, and I've also got a 'Buy' button. I can actually switch these around to be 'Buy' or 'Sell'. And you can see the impact that, by changing this around, you can actually have, something like coffee can have a huge impact on your raw performance in my basket. So you can also go ahead and change the weight of things as well. And as you can see, their performance there changes accordingly. For example, I know that coffee has done particularly well. If I increase that percentage at the expense of the other products, it will increase the overall aggregate performance of the mix. If I bring that back the opposite direction, obviously that will have the opposite negative effect, and so on and so forth.

So, what it allows you to do is to try and identify a series of products that are either trending really well in one direction or trending really badly in the other. And it's very, very possible for you to continue to add other products on to here as you feel is appropriate. For example, I could put rough rice in there, I could go ahead and put soybean in there and a whole bunch of other products as well, just to see how that's performing.

So, if I just close that down for a second and go to my Trading Tools area, I can actually pull up another mix that I've already created. For example, I quite like to mix up some of my favourite mining stocks. And as you can see there, you can see a wide variety of performance. This is UK mining stocks but I could be looking at Australian or Canadian or US, for example. As you can see, I've already got these already saved on here and I've got a wide selection of different buys and sells and different amounts of exposure on there. And as I begin to move these in and move out, it can have quite a decent impact on the overall health of your position. This can give you a bit of an idea about what products are over-performing and under-performing in any particular area. So I can see that Lonmin has performed incredibly well over the last couple of months, or I can see some of the other products have not been quite so good. For example, Vedanta in this case. And that gives you a bit of an idea about how to best utilise the portfolio mixer. It can be utilised across multiple asset types, and this could give you a real good flavour of how products compare against each other.

What is the portfolio mixer?

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