Sep 21, 2025 · Tracking error is calculated by taking the standard deviation of the difference between the portfolio returns and the benchmark returns over a specified period.

Tracking error is frequently categorized by the way it is calculated. A realized (also known as “ex post”) tracking error is calculated using historical returns. A tracking error whose calculations are based on …

Guide to Tracking Error Formula. Here we discuss how to calculate tracking error for the portfolio with examples and excel template.

Jun 2, 2024 · In this article, we will determine parameters such as Active Return, and Squared Active Return to calculate the tracking error in excel.

In a factor model of a portfolio, the non-systematic risk (i.e., the standard deviation of the residuals) is called "tracking error" in the investment field. The latter way to compute the tracking error …

Tracking error is the difference between an investment portfolio’s returns and the index it mimics or tries to beat. Know its formula, factors, significance.

May 12, 2025 · To find tracking error, subtract the benchmark’s total returns from the investment portfolio’s returns. The portfolio returns are deducted from the benchmark first. Thereupon, the …

Jan 23, 2024 · Tracking error can be calculated using various methods, such as the standard deviation of excess returns or the root mean square error (RMSE). Both methods involve comparing the …

Oct 10, 2019 · Learn how to calculate and interpret tracking error, the difference between portfolio returns and a benchmark index, with practical examples.

The way to calculate tracking error is to compare the fund returns with the benchmark returns in the following way. In particular, every day (or week, or month) we compare the performance of the fund …