How to Calculate Portfolio Weights

How to Calculate Portfolio Weights
Using weights of their securities, investors can calculate other helpful ratios.

Based on Value of the Portfolio

Step 1

Add the value of each investment in your portfolio to calculate the portfolio’s total value. You can find this information on your brokerage statement. As an example, you own stocks in Company A, Company B and Company C. You own $700, $200, and $800 in the stock, respectively. The total value of your portfolio is then $700 plus $200 plus $800, which equals $1,700.

Step 2

Find the value of the asset for which you want to determine the weight. In our example, if you want to calculate the weight of your Company C stock in your portfolio, the value is $800.

Step 3

Divide the value of the asset by the value of the portfolio to determine weight based on value. In our example, $800 divided by $1,700 equals a weight of the Company C stock of 0.47 or 47 percent.

Based on Units

Step 1

Determine the total number of asset units in your portfolio. For this example you own stock in Company E, Company F and Company G. You own 20 shares, 40 shares and 50 shares, respectively. The total number of asset units is 20 plus 40 plus 50, which equals 110 shares.

Step 2

Determine the total number of units owned for which you want to know the weight. In our example, if you want to find the weight by unit of Company G stock, you own 50 units.

Step 3

Divide the number of units of the asset by the total number of units. In our example, 50 divided by 110 equals a weight of Company G stock on 0.455 or 45.5 percent in the investor's portfolio.