RiskCurve Theory is an "actuarial" (statistical) investment methodology developed by PowerStocks Research that uses past history of a shares' daily price coupled with probability models, to design portfolios that can meet specific requirements such as high growth or low volatility etc. according to specific risk parameters that can be matched to a clients' risk profile. This is a very new field of research development and not as well documented and proven as all the other international strategies we track.

PowerStocks RiskCurves are an extension of our ground-breaking research of the Probability of Returns for the JSE ALSH. We take the methodology we used to determine the probabilities of winning on the ALSH index and apply them to individual shares on the JSE.

Every share on the JSE has its own unique "fingerprint" or personality determined by rate of growth, volatility, industry, liquidity, market-cap, cycle-trends, its management etc. The RiskCurves attempt to expose the personality of individual JSE shares for the investor by analysing its historical daily price data as far back as possible, right back to 1980 in some cases. We then create thousands of individual investments, one for each day of the shares' existence and track 1,3,6 month and 1,2,3,...10 year subsequent growth of these investments (excluding dividends for now, but wait for RiskCurves-II).  We then use this data to create probability models of returns.

To get a more detailed introduction to RiskCurves as well as access to specific RiskCurve data for individual JSE shares, click here : RiskCurves Theory.

We launched the first RiskCurves Model Portfolio, dubbed "BLUECHIP" based on the analysis of the 10 largest shares by market capitalisation on the JSE to derive a portfolio of just 5 shares that statistically should outperform the ALSH index as well as the TOPI (TOP-40) index. This is a very promising field of investment research and we will launch new portfolios as we complete our catalogue of RiskCurves for the JSE (very painful process).

To track the progress of various RiskCurve model portfolios, or see what shares make up these portfolios (in case you want to open a portfolio for yourself) or for updates on our findings to this theory that can assist you with investment returns, go to the RiskCurves Strategy Blog (subscriber password required.)
 
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