Comparison to average

Categories: Neoland-App Dashboard

Veröffentlicht am: 24. June 2021
Written by: Marius Siegert

We want to use this ratio to express how many percent the AI performance is better or worse than that of the average investor. But how do we define the performance of an average investor?

In this analysis, we assume that the majority of private investors who are active on the financial market have invested in the MSCI World via an ETF. The MSCI World is a global stock index that tracks the performance of around 1,600 stocks from 23 industrialized countries (1). Therefore, we view the performance of the MSCI World as the average performance that private investors can achieve in the stock market without the use of AI. When calculating the performance, the time of activation of your AI is always used as the starting point.


Example:

Your AI achieves a performance of 10% after 8 weeks of activation and your account balance is 3.300 NEOEURO. The MSCI World, on the other hand, achieved a performance of 6% in the same period. So the comparison to the average is 4% (10% - 6%).
In technical terminology, these 4% are often referred to as Outperformance means: "The AI has outperformed the MSCI World by 4%". So with an investment of 3.000€ in a MSCI World ETF you would have 3.180€ at the end of the 8 weeks. That is 120€ less. By using your AI in Neoland you could achieve a better performance than with a classic MSCI World ETF.

Sources

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