Portfolio Design

Advanced concepts in stock investment portfolio design.  Fundamentals, technical analysis and many other related topics are discussed.

Using the The Portfolio123 Conditional Node

Recently, many Portfolio123 members have been asking questions about a feature in the Ranking System module called Conditional Node. A conditional node is like an IF ... THEN ... ELSE statement in conventional programming, but due to interactions with the ranking algorithm, its actual usage becomes very difficult to understand.

Through the next series of posts I hope to unravel some of the mystery surrounding the conditional node and demonstrate how to use it to make the underlying stock universe more functional, make better and cleaner ranking systems, and demonstrate more sophisticated design possibilities such as style shifting (Pure Value / Pure Growth for example).

The tools I will use for the most part are a ten stock universe consisting of the tem stocks with the highest market capitalization on the DJIA index. The custom universe definition si shown below.

By clicking on the Run button, you can see the symbols and names of these ten stocks as of today.

In addition to the custom universe, a ranking system called Conditional Ranking 1 will be used for the examples.


The ranking system to start with uses one factor labeled Liquidity.  It is simply MktCap or market capitalization.  The other tool that will be used is the Ranks module. This is accessed by clicking on the corresponding menu item on the left side of the screen (shown above).

The fields should be set up as shown, setting the NAs to Negative, selecting the 10 Stock Universe, and Columns to Include Composite Ranks.  Click on the Get button to retrieve the ranks for the ten stocks as shown below.

As can be seen from the above figure, the stock ranks are ordered from 90 down to 0, based on market capitalization.  That's it for this post, next post I will start into how the conditional node works.

by Steve Auger