I Termini della Finanza

Understanding Correlation in Investment Portfolio Management

Investment portfolio management is an essential aspect of financial planning, and investors must make informed decisions to optimize their returns. One of the most important factors to consider when constructing an investment portfolio is correlation.

How to Use Discounted Cash Flow to Evaluate a Company

When evaluating a company, one of the most important factors to consider is its ability to generate cash flow. However, it is not just the amount of cash flow that matters, but also the timing of that cash flow. This is where the discounted cash flow (DCF) method comes in. In this article, we will explain what DCF is and how to use it to evaluate a company's value.

Understanding Maximum Drawdown in Financial Investments

Maximum Drawdown (MDD) is a popular metric used by investors to assess the risk associated with an investment portfolio. It measures the largest percentage loss an investor can expect to experience from peak to trough, indicating the maximum downside risk that an investment can have. In this article, we will discuss the concept of Maximum Drawdown, how it can be calculated, and its significance in the financial world.

The importance of ROE (Return on Equity) in company valuation

ROE is an important valuation metric because it indicates how efficient the company is in the use of its capital. A company with a high ROE indicates that it is generating a high return for its shareholders, while a company with a low ROE indicates that it is generating a lower return on invested capital.

Compound interest: the secret to growing your savings

Let's see what compound interest is and how it affects the exponential increase in value of one's investment portfolio over the years

Fear Greed Index: the indicator that reveals market sentiment

Today we look at this index that measures market sentiment and try to understand how it can be exploited in times of particular market turmoil

Pension funds in Italy: does it make sense? And what are the pros and cons

The importance of having a pension fund is a crucial issue for the financial stability of our future. In a country like Italy, where it is possible to get tax deductions, a pension fund can be a smart choice to guarantee a secure and satisfying retirement

Price/Earning (PE) and Price/Earning to Growth (PEG): how to use these financial indicators to make investment decisions

Let's look at these two financial indicators and how they can be used among the parameters to assess the goodness of a company for its investment portfolio

Capital Asset Pricing Model (CAPM)

Let's take a look at how CAPM works and how this model is used in finance

Analysis of Variance (ANOVA)

Let's look at how analysis of variance (ANOVA) is defined and how it is used in finance

Time-Weighted Rate of Return

Let's see how the time-weighted rate of return is defined and how it can be used to evaluate one's return on investment portfolios

Alpha in finance

Let's see how the alpha coefficient is defined and try to understand how this technical investment risk index is used

Beta in finance

Let's see how the beta coefficient is defined and try to understand how this technical investment risk index is used

Money-Weighted Rate of Return

Let's see how the money-weighted rate of return is defined and how it can be used to assess one's return on investment portfolios, especially in CAP (Capital Accumulation Plan) cases

What you should know about inflation

Let's take a closer look at the concept of inflation and why it is important to know it for one's investments

Average Annual Return (AAR)

Vediamo com'è definito il Rendimento Medio Annuo e come valutarlo sul proprio portafoglio investimenti

Maximum drawdown

We better understand how to interpret the maximum drawdown of an investment portfolio and use it to understand whether different assets meet their risk profile

Compound annual growth rate (CAGR)

Let's see how the compound annual growth rate is defined and how to calculate this value on your investment portfolio

Sharpe Ratio

Let's take a look at how the Sharpe index is defined and how to make the best use of it when evaluating an investment portfolio

Volatility

Let's see how volatility is defined and how to assess risk in an investment portfolio