Methodology
Portfolio Health Score
A single 0-100 score summarizing portfolio quality across factor diversification, smart money alignment, insider signals, concentration, and red flags. This is a heuristic summary of available data, not an investment recommendation or a prediction of returns.
Data Sources
- Latest portfolio positions, weights, and account metadata
- Daily 19-factor exposures and portfolio concentration metrics
- Holder IQ, insider-signal, and filing red-flag scores
- Brokerage sync freshness and unsupported-position exclusion reasons
Validation Status
The claims registry tracks validation evidence for these scoring components. The weights below use the calculation's constants.
30 percent
Portfolio health score weight defined in src/services/portfolio
Test evidence: tests/services/portfolio.test.ts
30 percent
Portfolio health score weight defined in src/services/portfolio
Test evidence: tests/services/portfolio.test.ts
Source: docs/claims.json, generated 2026-09-07.
Scoring Model
Four components contribute to the score; a red-flag penalty is subtracted. Each component is scaled to 0-100:
health_score = 0.3 × factor_balance
+ 0.3 × holder_iq
+ 0.2 × insider_sentiment
+ 0.2 × diversification
− 0.15 × red_flag_penalty
Final score clamped to [0, 100] and mapped to letter grade.Score Components
Grade Thresholds
Numeric scores are mapped to letter grades for quick interpretation:
Component Details
Factor Balance (30%)
Measures deviation from targets for seven style factors. Each factor is averaged over positions with measured data. Missing exposures are excluded, rather than treated as neutral exposures.
Smart Money Alignment (30%)
Averages the Holder IQ percentiles of eligible company shares with available data, weighted by their portfolio value. Fund units and cash do not receive a company institutional-quality score.
Insider Sentiment (20%)
Aggregates insider trading signals across holdings. Net buying improves score; net selling (especially by C-suite) reduces it.
Diversification (20%)
Measures how evenly value is distributed across held positions. It does not inspect the securities inside a fund or compare sector weights with a benchmark. A large index-fund position can therefore reduce this component despite underlying diversification.
Red Flag Exposure (up to 15 points deducted)
Presence of critical or high-severity filing red flags in held positions reduces score. See Red Flags methodology.
Limitations
- Score reflects current snapshot; does not predict future performance
- Component weights are heuristic policy choices. A grade alone does not establish that a portfolio is suitable or that a critical issue exists.
- Some data (e.g., 13F filings) has 45-day lag from quarter end
- Company signals require identified US-listed, USD-denominated company shares. Funds, cash and other assets remain in allocation and portfolio-value coverage totals.
- There is no fund look-through. Missing factor, Holder IQ or insider data receives a neutral component score of 50 when none is available; this is not evidence of a neutral investment outlook. Read coverage alongside every score.
- Calculation method 2.0. Historical trends and saved comparisons use the same method; older unversioned scores are excluded rather than presented as investment performance changes.
Citations & Research Basis
- Modern portfolio theory motivates diversification and concentration penalties.
- Multi-factor attribution research informs factor-balance scoring and VaR targets.
- Institutional ownership, insider-trading, and filing-risk evidence inform the non-price components.
See also: Attention Queue | Factor Model | Holder IQ