Ex-Post

Ex-post may refer to a set of meanings. Literally from Latin the word is translated as “after the fact”. Thus, it's mostly used to denote actual returns. Historical returns may be used in the case of evaluating the probability of loss. Ex-post is also the reverse description of the word ex-ante. Ex-ante refers to the phrase “before the event”.

Where Ex-Post may be used

The ex-post data is used not only in order to compare predicted earnings with the actual one, but to predict future earnings as well. Thus, ex-ante analysis and ex-post analysis are deeply connected with each other. Data that has been received through ex-ante analysis is also used in different studies. For example, value at risk statistics includes using ex-post information. The study itself focuses on counting how many losses a portfolio may incur.

It’s a usual situation when yield that has been calculated with the help of ex-ante analysis and yield that has been calculated with the help of ex-post analysis are not the same. Since ex-ante analysis bases its calculation on the predicted information, the information can’t be precise. However, investors build their investing strategies with the help of predicted returns. In case they include both expected returns and actual returns, it may be called a complete risk analysis. In this case, to calculate ex-post an investor needs to take the current market price and deduct the price the investor paid. Thus, the performance of an asset may be seen.

How to evaluate Ex-post

There is a specific way to calculate ex-post. To calculate it you need to determine the period for which you will calculate ex-ante and particular variables, such as the beginning asset value, the ending asset values, its increases or falls and earnings received from the asset within the determined period. Using this ex-post information is exceedingly useful to identify approximate returns. Also, such an analysis may prove the efficiency of risk assessment methods or inefficiency.

Ex-post studies are prone to be conducted for an interval that doesn't exceed one year. Also, it’s used to evaluate the investment’s earnings for an investment year to date. Year to date phrase means the period, which beginning corresponds to the beginning of the fiscal or calendar year and the end is the current day.

Ex-Post Analysis

This type of analysis comprises attribution analysis (in other words, benchmark analysis), which, in its turn, includes the assessment of investment portfolio returns and other factors that may be affected by it. Normally, this kind of analysis is used in long-only funds.

Regression analysis is the center of ex-post analyses, since they carry out a regression of the portfolio’s yields versus the returns of the market index. These calculations are made in order to evaluate the potential earnings and losses of a portfolio in case the market would expose. Such measures as beta and alpha are calculated as a part of the regression.