Blend
Blending different expected return models
Last updated
Blending different expected return models
Last updated
The WPA provides the option to blend any two expected return models. Users must select Blend Type One and Blend Type Two from the drop down menus in the parameters box.
When the Blend column is selected, a Confidence column appears to the left of this column.
This confidence level applies to the estimation type which is selected in Blend Type One. For example, if Blend Type One is historical and the Confidence level is 60%, the historical returns will be given a 60% weighting in the blend calculation.
Blending two estimation types can help users to develop more throughout estimations by balancing out the pros and cons of different estimation methods.
