A derived transaction portfolio enables you to perform pre-trade what-if analysis on a live parent transaction portfolio. See how to create a derived portfolio.
A derived portfolio is an exact replica of its parent at the point it is created. The derived portfolio inherits:
- Every existing transaction and other item of economic activity. It also inherits every subsequent change in most circumstances. So if you upload more transactions to the parent, those additions are automatically synced to the derived portfolio. If you correct an existing transaction in the parent, the derived portfolio inherits the edit. Understand how transactions are synced in derived portfolios.
- The settings of the parent portfolio, such as the creation date, instrument scope, transaction type scope, sub-holdings keys, amortisation method and so on. You can change these settings in the derived portfolio if you want, with the exception of the instrument scope and creation date (this is not recommended).
Optionally, you can load separate economic activity into the derived portfolio as well, with transactions impacting the same underlying instruments in the latter taking precedence.
Derived portfolios in conjunction with scopes are a powerful construct. For example, to do pre-trade what-if analysis, you can create a derived portfolio in a new scope linked to the parent portfolio in the ‘official’ scope. You can then book scenario transactions in the derived portfolio and compare the performance of the two without affecting the live book. For a demonstration, see this Jupyter Notebook.