Editing Analytics (section)

=== Portfolio analytics ===
A common application of business analytics is [[portfolio analysis]]. In this, a [[bank]] or lending agency has a collection of accounts of varying [[Value (economics)|value]] and [[risk]]. The accounts may differ by the social status (wealthy, middle-class, poor, etc.) of the holder, the geographical location, its net value, and many other factors. The lender must balance the return on the [[loan]] with the risk of default for each loan. The question is then how to evaluate the portfolio as a whole.<ref>{{Citation|last=Pilbeam|first=Keith|title=Portfolio Analysis: Risk and Return in Financial Markets|date=2005|url=https://doi.org/10.1007/978-1-349-26273-1_7|work=Finance and Financial Markets|pages=156–187|editor-last=Pilbeam|editor-first=Keith|place=London|publisher=Macmillan Education UK|language=en|doi=10.1007/978-1-349-26273-1_7|isbn=978-1-349-26273-1|access-date=2022-01-09|url-access=subscription}}</ref>

The least risk loan may be to the very wealthy, but there are a very limited number of wealthy people. On the other hand, there are many poor that can be lent to, but at greater risk. Some balance must be struck that maximizes return and minimizes risk. The analytics solution may combine [[time series]] analysis with many other issues in order to make decisions on when to lend money to these different borrower segments, or decisions on the interest rate charged to members of a portfolio segment to cover any losses among members in that segment.{{Citation needed|date=January 2022}}