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While most backtesters only look at historical price data, the Kalpi Portfolio Analysis engine calculates the live, aggregated fundamental valuation of your specific asset basket. The two most critical fundamental anchors are the Price-to-Earnings (P/E) and Price-to-Book (P/B) ratios.

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How Kalpi Aggregates Fundamentals

You cannot simply average the P/E ratios of 10 different stocks. Kalpi calculates a Weighted Harmonic Mean for your portfolio to ensure that companies with negative earnings or massive valuations do not mathematically distort the reality of your basket.

Portfolio P/E (Price/Earnings)

Measures how much you are paying for ₹1 of aggregated corporate earnings. A highly elevated P/E relative to your benchmark means your strategy is deeply tilted toward expensive “Growth” stocks.

Portfolio P/B (Price/Book)

Measures your portfolio’s valuation relative to its raw net asset value. A P/B heavily below the benchmark indicates your strategy is structurally tilted toward deep “Value” or distressed assets.

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The Strategic Benchmark Cross-Check

Inside the Overview tab, Kalpi directly pits your Portfolio P/E against your chosen Benchmark index. If your algorithmic strategy generates a 20% CAGR but has a Portfolio P/E of 65.0, while the Nifty 50 has a P/E of 22.0, your strategy is taking on massive fundamental valuation risk to achieve those returns. If market liquidity dries up, high-P/E portfolios are typically the first to suffer severe drawdowns.