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Percentage growth of PAT or revenue of stocks in a particular portfolio having different allocation

        We generally calculate the CAGR of revenue growth of a company. But we will not calculate the CAGR of revenue or profit growth of our personal portfolio. So for me it is necessary to calculate our personal profit growth of our portfolio.

        Let say that I have 6 company in my portfolio namely A,B,C,D,E,F. Let % of each stock allocation in my portfolio be

        We can apply this in formula every quarter to calculated the % growth of our portfolio in respect to PAT, Revenue or whatever we want 
        Now let A,B,C,D,E,F will PAT growth at % wise in Q1 to Q2 or we can calculated in year on year

Now the % allocation of each company of my portfolio will grow in term of PAT and so on.
The formula becomes
 % 𝑔𝑟𝑜𝑤𝑡ℎ 𝑜𝑓 𝑎 𝑐𝑜𝑚𝑎𝑝𝑎𝑛𝑦 𝑖𝑛 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 = % 𝑔𝑟𝑜𝑤𝑡ℎ 𝑜𝑓 𝑡ℎ𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 𝑓𝑟𝑜𝑚 𝑄1 𝑡𝑜 𝑄2 × % 𝑎𝑙𝑙𝑜𝑐𝑎𝑡𝑖𝑜𝑛 𝑖𝑛 𝑡ℎ𝑒 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖o

For here 

    The PAT growth of A in my portfolio will be = 30 × 23% = 30 × 23 100 = 6.9% 

    The PAT growth of B in my portfolio will be = 10 × 15% = 10 × 15 100 = 1.5% 

    The PAT growth of C in my portfolio will be = 18 × 19% = 18 × 19 100 = 3.42% 

    The PAT growth of D in my portfolio will be = 15 × 8% = 15 × 8 100 = 1.2% 

    The PAT growth of E in my portfolio will be = −12 × 13% = −12 × 13 100 = −1.56%

    The PAT growth of F in my portfolio will be = 11 × 22% = 11 × 22 100 = 2.42% 

Now % growth of the Portfolio of Containing stocks A,B,C,D,E,F at a different % of portfolio allocation and different % of growth will be= 6.9%+1.5%+3.42%+1.2%+(- 1.56%)+2.41%=13.87%

    Which is the % growth of overall portfolio of different allocation of A,B,C,D,E,F 


    Now take another simple example. A portfolio contain three stock A,B,C,D. having equally allocation of 25% each. Let in in particular quarter all of them grow at 30% each. Then what will be the overall % growth of that portfolio. 

    Here 

        Allocation is same 25% each 

        Gwroth is same 30% each

    Now 

        % 𝑔𝑤𝑟𝑜𝑡ℎ 𝑜𝑓 𝐴 𝑖𝑛 𝑡ℎ𝑎𝑡 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 = 30 × 25% = 7.5% 

        % 𝑔𝑤𝑟𝑜𝑡ℎ 𝑜𝑓 𝐵 𝑖𝑛 𝑡ℎ𝑎𝑡 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 = 30 × 25% = 7.5% 

        % 𝑔𝑤𝑟𝑜𝑡ℎ 𝑜𝑓 𝐶 𝑖𝑛 𝑡ℎ𝑎𝑡 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 = 30 × 25% = 7.5% 

        % 𝑔𝑤𝑟𝑜𝑡ℎ 𝑜𝑓 𝐷 𝑖𝑛 𝑡ℎ𝑎𝑡 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 = 30 × 25% = 7.5% 

Now the total % growth of the portfolio become= 7.5%+7.5%+7.5%+7.5%= 30% 


Proved.

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