Principle:HKUDS AI Trader Portfolio Valuation

Knowledge Sources	Portfolio Valuation
Domains	Quantitative_Finance, Portfolio_Management
Last Updated	2026-02-09 14:00 GMT

Overview

A portfolio valuation technique that computes daily total portfolio value from position records and historical price data.

Description

Portfolio Valuation reconstructs the daily total value of a trading portfolio by combining cash holdings with the market value of all stock positions. For each position entry in the trading log, it looks up the closing price of each held stock on that date and multiplies by the held quantity, then adds the remaining cash balance.

This produces a time series of total portfolio values that serves as input for performance metrics calculation. The valuation handles the complexity of multi-asset portfolios where each position has a different quantity and price trajectory.

Usage

Use this principle after a backtesting simulation to convert position records into a portfolio value time series. This is the prerequisite step before computing performance metrics.

Theoretical Basis

# Pseudocode for portfolio valuation
for each position_entry in position_log:
    date = entry.date
    cash = entry.cash_balance
    stock_value = 0
    for symbol, quantity in entry.positions.items():
        price = get_price(symbol, date)
        stock_value += quantity * price
    total_value = cash + stock_value
    record(date, cash, stock_value, total_value)

$V_{total}(t)=Cash(t)+\sum _i{Q}_i(t)\times P_i(t)$

Where $Q_i(t)$ is the quantity of asset $i$ at time $t$ and $P_i(t)$ is its price.

Related Pages

Implemented By

• Implementation:HKUDS_AI_Trader_Calculate_Portfolio_Values