Portfolio health
Kereon's 0–100 score for the shape of a portfolio — not a view on any holding.
Formula
Health = Σ part × weight ÷ Σ weights of the parts with data
Inputs
- Diversification (22%). The diversification score.
- Risk-adjusted return (20%). Sharpe −0.5 scores 5, 0 → 22, 0.5 → 45, 1.0 → 68, 1.6 → 86, 2.5 → 96.
- Concentration (16%). The concentration score.
- Drawdown resilience (16%). Maximum drawdown −70% → 4, −50% → 22, −35% → 45, −22% → 70, −12% → 90.
- Business quality (16%). The average of the holdings' quality scores, each holding counted once.
- Income (10%). Portfolio yield 0% → 30, 1% → 48, 2% → 62, 3.5% → 78, 5% → 90.
How to read it
Grades: A+ from 90, A 83, A− 76, B+ 70, B 63, B− 56, C+ 50, C 43, C− 36, D 28, E below.
How to use it
One number for the shape of a portfolio; the parts show what moves it.
Limitations
Grades the shape, not whether any holding is a good investment.
In Kereon
Portfolio. A weighted blend of six scores: diversification (22%), concentration (16%), risk-adjusted return from the Sharpe ratio (20%), drawdown resilience (16%), business quality of the holdings (16%) and income (10%). A part with no data leaves the blend and the rest are reweighted.
Also called: portfolio health.