The Z-Score is one of our most advanced metrics to get an overview of the quality of a service within the platform. Below, we will go over a basic understanding of how the Z-Score works and how to take advantage of this new technology! 🚀
In This Article:
What is the Z-Score
After navigating to the marketplace, you may notice new metrics as shown in the picture below:
The number beside each service profile picture is what we call the Z-Score. It utilizes an AI engine to evaluate and assign a point value ranging from 0 (minimum) to 100 (maximum). This score is calculated based on four different metrics, in which the data is taken from the last 180 days of the service.
Let’s take a look at the four main categories that the Z-Score takes into consideration:
Profits: Where we measure information regarding the profitability of the service. The maximum number of points that can be obtained is 27.
Risk: Where we measure information regarding the risk level of the service. The maximum number of points that can be obtained is 30.
Service Management: Where we measure the management of this service. The maximum number of points that can be obtained is 25.
Balance: If the service has balanced the first three categories, it provides a Boost in the score. The maximum number of points that can be obtained is 18.
After clicking on a service’s Z-Score, you will see that each of the four main categories has its own sub-categories.
These broken down sub-categories all have their own score, and are determined through a system of levels. For example, a service with 50% of profits will receive more points than one with only 10% in the same period.
For more detailed information on how these individual metrics and levels are calculated, check out this article here:
Take Advantage of the Z-Score
Now that we understand the Z-Score, let’s see how we can use it to our advantage to create a stronger investment portfolio.
It is important to remember that any investment has risks, and in the end, it is up to you to do your own research and choose your services carefully. With that being said, the Z-Score is here to help! 🚀
Again, it is up to you to determine how much risk to take. A good rule of thumb is diversifying your investments and not investing more than 10% of your portfolio in a risky strategy. Take a look at this service’s Z-Score below:
This service has a score of 94, and indicates that it is a very low risk investment. This means that the service, during the last 6 months, has a history of performing well while managing its risk, which would make it a great option to invest larger portions of your portfolio.
Now if we continue looking for another service on the marketplace, we may come across one that has a very high risk indicator:
This service has a Z-Score of 8, however you may also notice that the 1 month profits on this service is 71.1%. This goes to show that the higher the risk, potentially the higher your reward may be.
If a service has a low Z - Score, it means the service doesn’t meet all of the requirements to be labeled as an extremely safe investment. However, even with a low score, remember that all services listed in our marketplace have made it through our rigorous manual inspections, and still meet our minimum standards.
You may wish to diversify a majority of your investments into services with lower risk indicators, while leaving a smaller portion to invest into higher risk services.
Again this is totally up to you, and although this tool is here to help, all risk is subject to each individual investor! 💡
Disclaimer: Z-Score is based on past data (previous 180 days). It can't be taken for certain that it will evolve the same way in the future. For a better overview of the each services performance, please visit the profiles and check the whole track record.