Here at Vested, we evaluate and write about a lot of companies. We also create thematic portfolios (Vests). To expedite this process, we built an internal tool that helps us carry out our research faster and with more rigor. Now, we are excited to release this tool for everyone!
AlphaScreener is designed to help you:
- Formulate investment strategies (based on both fundamental and technical signals)
- Shortlist companies from all the investable universe
- Create multiple watchlists
- Evaluate different strategies by seeing how they would have performed in the past twenty years (backtest).
Screen securities using human readable language
Let’s say you want to screen for companies that have the top FCF margin that are growing rapidly, but you don’t want to look at small microcaps. You can do the following:
Once you’ve set up the filters, a list of companies are shown:
Backtest over 20+ years of historical data
AlphaScreener provides a powerful backtest function that we call ‘Evaluate’. The Evaluate function is powerful because:
- It only takes information (share price data and fundamental information) that is available publicly at that moment in time to avoid lookahead bias
- It uses information on all stocks that are active at the time (and might have since been delisted) to avoid survivorship bias
- It provides statistical robustness to the backtesting process
Provides summary hypothetical past performance
Provides hypothetical performance over past stress events
The Evaluate function also gives you a snapshot of how your strategy would have fared under past stress events.
Base Rates – minimize element of luck
To provide statistical robustness to the backtesting process and remove the element of luck (based on investment starting times), we simulate multiple portfolios at different start dates and holding periods. We aggregate the returns of these hypothetical portfolios, compare them with the performance of the S&P 500 benchmark over the same time period, and compare the two performances. We then count the rate at which the different hypothetical portfolios beat the benchmark. This is called the Base Rates.
In the chart above, the Single Year Return Base Rate is 46%. This implies that the simulated odds of you beating the S&P 500 benchmark, had you invested in the strategy defined in the screener (starting on some random date in the past 20 years and holding for one year), over the same time period is about 46%.
Note: while Base Rates might be useful to construct your investment strategy, please keep in mind that past performance is not an indication of future results. The hypothetical portfolio performance is subject to fluctuation depending on shifting market conditions.
Create multiple watchlists
You can also create multiple watchlists if you have multiple strategies that you want to monitor.
Ok, this is cool! How do I sign up?
- Go to the AlphaScreener website for signup
- Create an account with your email or sign up with Google. (You have to create a new AlphaScreener account even though you are a Vested user).
- That’s it! Start exploring
AlphaScreener offers two pricing tiers right now:
- Basic has a more limited functionality, but it’s FREE for anyone to use (you don’t have to be a Vested user)
- Plus has more capabilities. If you are a Vested Premium subscriber, you have access to the Plus functionality at no additional cost. You can get the activation code from the Vested App to activate AlphaScreener Plus.
How to activate your AlphaScreener Plus (if you’re a Vested Premium subscriber):
- Go to the Manage Plan section on the Profile menu (you may need to update your app to the latest version if you don’t see the option).
- Click on the ‘How to Activate’ button on the AlphaScreener Plus Subscription card.
- Follow the instructions on the screen.
As always, our aim is to help you make better investing decisions. Over time, we will add more functionalities. Please write to us at email@example.com if you have any feedback and suggestions.