⚡ ETF Pulse · Methodology
How We Simulate
Your Portfolio's Future
Six plain-English steps. No formulas. Exactly how 1,000 futures get generated every time you run the What If simulator.
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5 years
of real daily prices per ETF
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1,200+
data points per ticker from Polygon.io
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1,000
simulated futures per scenario run
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~70 ETFs
with hand-calibrated factor sensitivities
How it works — step by step
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Step 01 · My ETFs page
You tell us your ETFs
Import your real holdings from any broker — paste a CSV, drag a screenshot, or add tickers manually. ETF Pulse reads your actual positions: ticker, shares, and cost basis. No logins to your brokerage. No API keys.
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Step 02 · Polygon.io · adjusted closes
We pull 5 years of real market data
For every ETF in your portfolio, we fetch 1,200+ daily closing prices from Polygon.io — five full years of actual market history, adjusted for splits and dividends. This is the same data professional quant funds use.
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Step 03 · Correlation matrix · 5-year history
We measure how your ETFs move together
SCHX and SCHB move almost in lockstep (0.99 correlation). SCHZ bonds often go the opposite direction when stocks fall. We capture these relationships mathematically so the simulation behaves like reality — when markets crash, correlated ETFs fall together, not independently.
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Step 04 · 6 scenarios · realistic factor shocks
You pick a scenario
Choose what you want to stress-test: an AI sector bust, a 30% market crash, a Fed rate hike, an oil spike, or a recession. Each scenario maps to the real market forces that drive ETF prices — tech sentiment, interest rates, oil demand, broad equity direction, and gold.
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Step 05 · 1,000 paths · 252 trading days each
We run 1,000 simulated futures
Using your ETFs' historical drift and the correlation structure, we generate 1,000 plausible year-long paths — each one a different version of how markets could unfold. Some paths are bad. Some are great. Most land somewhere in the middle.
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Step 06 · P10 · P25 · P50 · P75 · P90
You see the honest range of outcomes
We sort all 1,000 results and show you five numbers: worst case (P10), below average (P25), expected / median (P50), above average (P75), and best case (P90). No single prediction. A realistic range — because the future is uncertain, and your tool should be honest about that.
Reading the results
How to understand the two numbers on each ETF
SCHX+4.0%▼ 6.2%
+4.0%
Expected annual return
What SCHX is expected to return over the next year under this specific scenario. Calculated from 1,000 simulated paths using real historical data plus the scenario shocks.
▼ 6.2%
vs Normal (no shock)
How much this scenario changes the expected return. SCHX would have returned ~+10.2% in a normal market — the scenario takes away 6.2 percentage points. A ▲ green arrow means the scenario helps that ETF.
💡 SCHZ (bond ETF) is the only holding that shows a ▲ green arrow in equity-down scenarios. Bonds and stocks are historically negatively correlated — when stocks fall, bonds often rise as investors seek safety. The simulation captures this relationship and shows it correctly.
Scenarios you can test
Six macro shocks. Any portfolio.
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AI Sector Burst
QQQ & XLK most exposed
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Market Crash
Sudden broad selloff
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Fed Rate Hike / Cut
Bonds and REITs react strongly
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Oil Price Shock
XLE surges · QQQ dips
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Recession
GDP contraction across sectors
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10-Year Treasury
Yield spike crushes growth stocks
Why you can trust the numbers
ETF Pulse doesn't invent risk scores. Every number traces back to real market data and standard financial methods used by professional portfolio risk teams.
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Real market data
Polygon.io adjusted closes — the same data source used by quant funds and institutional trading desks.
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Correlated randomness
We use Cholesky decomposition so SCHX and SCHB fall together in a crash, not independently — matching reality.
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Standard GBM model
Geometric Brownian Motion is the industry-standard method for simulating asset prices over time.
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Verified arithmetic
Every formula in the simulation has been independently verified. Full methodology available for review.
Common questions
FAQ
Is this financial advice?
No. ETF Pulse is an educational simulation tool. Results show a range of modelled probabilities — not predictions or recommendations. Always consult a licensed financial advisor before making investment decisions.
How accurate are the simulations?
The simulation is built on real historical data and standard financial modelling methods used by professional risk teams. That said, past correlations do not guarantee future behaviour. A model that says "P10 = −14%" is not predicting a loss — it is saying that in 1 out of 10 historical-like scenarios, the outcome would be at least that bad. Use it to understand risk, not to predict returns.
What do the two numbers on each ETF row mean?
The first number (e.g. +4.0%) is the expected annual return for that ETF under the stress scenario you chose. The second number (e.g. ▼6.2%) is how much the scenario changes that return versus a normal market — so ▼6.2% means the scenario costs that ETF 6.2 percentage points of expected return. If the arrow is ▲ (green), the scenario actually helps that ETF — which is how SCHZ bonds behave in an equity selloff.
What is "vs Normal" in the ETF table?
"Normal" means no scenario shock at all — the portfolio running on its 5-year historical drift with zero macro stress applied. The delta column tells you exactly how much of your expected return the stress scenario takes away (or adds).
Why does SCHZ sometimes go up when stocks fall?
SCHZ is a bond ETF. Bonds and stocks are historically negatively correlated — when investors panic and sell equities, they often buy bonds as a safe haven. In the simulation, this is captured by SCHZ's negative factor betas: it has a negative sensitivity to both tech sentiment and broad market direction, so when those factors go negative (stocks falling), SCHZ's expected return actually increases slightly.
Where does the price data come from?
All price history is sourced from Polygon.io, a professional-grade market data provider. We use adjusted daily closing prices going back 5 years, which accounts for stock splits and dividend distributions. The same API powers hedge funds and institutional trading desks.
Can I use my actual portfolio holdings?
Yes — that is the recommended approach. Import your holdings on the My ETFs page (CSV, Excel, PDF, or screenshot). Once imported, the What If simulator automatically uses your real positions instead of the sample 10-ETF basket. Your data stays in your account and is never shared.
Ready to stress-test your portfolio?
Import your holdings, pick a scenario, and see 1,000 simulated futures in under 10 seconds.
Free to use · No credit card required · Full methodology
⚠️ Disclaimer: ETF Pulse is an educational portfolio simulation tool and does not constitute financial advice. Monte Carlo simulation models probabilities, not predictions. Historical correlations and returns may not persist in future market conditions. Past performance does not guarantee future results. Always consult a licensed financial advisor before making investment decisions.