How PRAAMS Personal works
Valuation
This factor assesses an asset's relative value, i.e., whether it is undervalued or overvalued compared to its peers. For stocks, it uses classic multiples for companies and banks and several sets of global and local peers from the same sector and industry. For bonds, it benchmarks them against peers with similar overall risk profiles in the same currency.Analyst / Market view
It summarises an asset's price upside or downside potential using price targets provided by the market analysts covering this stock. For bonds, it is called the Market view. It compares the bond's spread to a 'fair' spread implied by the bonds with similar overall risk profiles in the same currency.F.A.Q.
PRAAMS Personal is a handy A-Z tool for individual investors that consolidates factual information about each asset and presents it simply and easily.PRAAMS is an IT company. We do not provide individual or customised or general investment or financial advice or issue recommendations, money or asset management, brokerage/dealership, or credit rating services of any kind to our clients under any regulation or law. Neither PRAAMS or its subsidiaries are a registered or authorised or qualified or eligible investment or financial adviser or planner, money or asset manager, securities broker/dealer, credit rating agency, or any other financial institution.
PRAAMS Ratio is a powerful risk-return ratio. It shows how much return an asset offers per unit of risk. It takes one of 7 values: 1 is the lowest score, i.e., this asset has high overall risk and low overall return potential, and 7 is the highest score, i.e., overall return potential is high while the overall risk is low.It has not been designed to indicate whether you shall buy, hold, or sell an asset and shall not be considered as such. This is because overall risk and overall return potential scores are general in nature, combining all critical risk and return factors. These may not be suitable for you, and, of course, the PRAAMS Ratio does not take into account your personal risk tolerance, financial objectives and constraints, and investing style.One may think of the PRAAMS Ratio as an improved version of the Sharpe ratio. Sharpe ratio is a relation between an asset’s performance and its risk measured by standard deviation. PRAAMS Ratio outperforms the Sharpe ratio:
- The Sharpe ratio is backward-looking, while the PRAAMS Ratio is forward-looking as it uses much more data to offer good forecasting power;
- The Sharpe ratio considers only market risk (standard deviation), while the PRAAMS Ratio covers all key risks, including market, credit and other risks as well, as all these may affect the instrument’s price;
- The Sharpe ratio is not standardised, ranging from minus to plus infinity, and it may be challenging to use for comparison across assets or portfolios. PRAAMS Ratio is standardised, varying from 1 to 7, for every asset class, and it is easy to compare individual assets and portfolios;
- The PRAAMS Ratio is designed with long-term investing in mind. It works best for investing horizons from one to five years, as confirmed by its numerous back-tests.
We use information from publicly available sources, which are general in nature and commonly known to most investors and which we deem reliable. These include exchanges, government agencies, and public data repositories. PRAAMS uses several layers of data: each subsequent layer validates and enriches the previous layers to increase reliability.PRAAMS provides information only on assets where sufficient critical data is available. Thus, inactively traded assets or those with poor disclosure are not covered.Currently, we cover over 50,000 traded stocks and over 60,000 bonds worldwide. We plan to add more stocks and bonds as well as ETFs and other asset classes soon.
If you don’t feel confident in investing, PRAAMS is a great start. Open the page of any asset, and it will take several seconds to understand the most important things.There is one number, from 1 to 7, on the top of the page, which is the PRAAMS Ratio. A score of 1 means the asset has poor return potential and very high risks. A score of 7 means this instrument has high return potential and low risks. A score of 4 is somewhere in between and performs along with the market. In other words, in the long term, the higher the score, the higher the return potential and the lower the risks. However, actual returns cannot be guaranteed in any way; please refer to our Terms & conditions.Next, there is PRAAMS Personal, a circle coloured in red and green. Returns are in green on the right, and risks are in red on the left. Each sector is on a standard 1-7 scale. Lower scores like 1 and 2 mean there is little return potential or negligible risk, as compared to peers. Lower scores are smaller in size and get coloured in pale. Higher scores are bigger in size and coloured in vivid green or red. For example, a large bright-red sector means this type of risk is high.Overall, if there are more green sectors than red, the instrument has more return potential than risks. If the picture is more red than green, risks exceed returns.
If you are an experienced investor or a professional, you are now able to analyse any stock or bond in seconds and enjoy the more advanced features. Apart from the PRAAMS Ratio and PRAAMS Personal circle, you will find in-depth information on each risk and return factor. We value your time and tried to make it as concise as possible.You can also make peer comparisons in seconds, comparing two instruments or one instrument to a peer group based on region, country, sector, and industry.Finally, you can instantly generate trade ideas based on geography, sector and individual factors.If you are interested in the B2B integration of PRAAMS Personal, please visit our B2B website or contact us at [email protected]
Information provided by PRAAMS does not take into consideration and has not been intended and designed to take into consideration all your personal investment goals, preferences, constraints, financial and tax situation, and other factors. The information is not intended to be used and does not constitute a personalised or customised recommendation or advice. Furthermore, we do not collect this information from you. Therefore, we do not and cannot provide recommendations that will suit you. The final investment decision belongs to you; we can help with factual analysis of risks and returns.
Comparing two asset classes has always been a significant problem in the investment industry. We solved it. You can use the PRAAMS Ratio to compare stocks and bonds, and even ETFs composed of stocks and bonds.
You can download PDF reports on every 100K+ assets covered by PRAAMS Personal. You can read it later in a more comfortable way, or you can share it with friends and colleagues. Please remember that the information in PRAAMS Personal is updated daily, and the report may quickly become outdated.
You can use the Explore tab to screen instruments and instantly research them. Select the relevant parameters, for example, country, sector, valuation, dividends, or default risk, and click the Explore button. The system will return results that match your search criteria. You can then order them using any parameter. Then, you can compare instruments to find the best match for you.PRAAMS does not offer any brokerage or asset management services, nor is it an authorised financial advisor. We cannot and do not recommend that you buy, hold, or sell any security. For more details, please refer to our Terms of service.
PRAAMS Personal uses an intelligent search system. You can search by company name, instrument ticker or ISIN. If you don't remember the name or ticker, start typing, and the system will provide several suggestions. Also, we designed the system to auto-correct minor typos.Sometimes, you may find several instruments related to one company, e.g. AAPL and AAPL.NE and AAPL.BA. These are Apple's shares listed on different exchanges. Because different listings may have different liquidity and other risk factors, we treat all of them as separate instruments.Tips from PRAAMS:
- We strongly recommend double-checking where the instrument you are interested in is listed. The suffix after the ticker, e.g., '. NS' or '.PA', indicates the exchange where this instrument is traded, NSE and Paris Euronext in this case. The best check combines the instrument's ISIN and the exchange suffix.
- We use the following convention to produce a bond ticker: issuer's equity ticker + coupon + maturity date. For example, for Apple Inc.'s bond with a 2% coupon maturing on 11 April 2035, the ticker will be 'AAPL 2% 11-Apr-35'.