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Testing Investment Portfolio Calculations in maybe-finance

This test suite validates the functionality of investment account holdings in the Maybe Finance application, focusing on portfolio calculations and financial metrics. The suite covers essential investment tracking features including portfolio weight, cost basis, and return calculations.

Test Coverage Overview

The test suite provides comprehensive coverage of investment holding calculations:

Portfolio weight calculations relative to account balance
Average cost basis computation across multiple trades
Total return trend calculations including absolute and percentage returns
Edge cases for both positive and negative investment returns

Implementation Analysis

The testing approach utilizes Minitest’s ActiveSupport::TestCase framework with modular test helpers for account entries and securities. The implementation leverages stub methods for isolated testing and includes helper methods for creating test securities and holdings with historical price data.

Technical Details

Testing tools and configuration:

Minitest test framework with ActiveSupport extensions
Custom test helpers for account entries and securities
Money gem integration for currency handling
Mock objects using stub methods for isolated testing
Date-based test data generation for historical pricing

Best Practices Demonstrated

The test suite exemplifies several testing best practices:

Isolated test setup using helper methods
Precise numerical assertions with delta tolerance
Comprehensive setup data creation
Clear test case organization and naming
Effective use of stub methods for controlled testing

maybe-finance/maybe

test/models/account/holding_test.rb

            
require "test_helper"
require "ostruct"

class Account::HoldingTest < ActiveSupport::TestCase
  include Account::EntriesTestHelper, SecuritiesTestHelper

  setup do
    @account = families(:empty).accounts.create!(name: "Test Brokerage", balance: 20000, cash_balance: 0, currency: "USD", accountable: Investment.new)

    # Current day holding instances
    @amzn, @nvda = load_holdings
  end

  test "calculates portfolio weight" do
    expected_amzn_weight = 3240.0 / @account.balance * 100
    expected_nvda_weight = 3720.0 / @account.balance * 100

    assert_in_delta expected_amzn_weight, @amzn.weight, 0.001
    assert_in_delta expected_nvda_weight, @nvda.weight, 0.001
  end

  test "calculates simple average cost basis" do
    create_trade(@amzn.security, account: @account, qty: 10, price: 212.00, date: 1.day.ago.to_date)
    create_trade(@amzn.security, account: @account, qty: 15, price: 216.00, date: Date.current)

    create_trade(@nvda.security, account: @account, qty: 5, price: 128.00, date: 1.day.ago.to_date)
    create_trade(@nvda.security, account: @account, qty: 30, price: 124.00, date: Date.current)

    assert_equal Money.new((212.0 + 216.0) / 2), @amzn.avg_cost
    assert_equal Money.new((128.0 + 124.0) / 2), @nvda.avg_cost
  end

  test "calculates total return trend" do
    @amzn.stubs(:avg_cost).returns(Money.new(214.00))
    @nvda.stubs(:avg_cost).returns(Money.new(126.00))

    # Gained $30, or 0.93%
    assert_equal Money.new(30), @amzn.trend.value
    assert_in_delta 0.9, @amzn.trend.percent, 0.001

    # Lost $60, or -1.59%
    assert_equal Money.new(-60), @nvda.trend.value
    assert_in_delta -1.6, @nvda.trend.percent, 0.001
  end

  private

    def load_holdings
      security1 = create_security("AMZN", prices: [
        { date: 1.day.ago.to_date, price: 212.00 },
        { date: Date.current, price: 216.00 }
      ])

      security2 = create_security("NVDA", prices: [
        { date: 1.day.ago.to_date, price: 128.00 },
        { date: Date.current, price: 124.00 }
      ])

      create_holding(security1, 1.day.ago.to_date, 10)
      amzn = create_holding(security1, Date.current, 15)

      create_holding(security2, 1.day.ago.to_date, 5)
      nvda = create_holding(security2, Date.current, 30)

      [ amzn, nvda ]
    end

    def create_holding(security, date, qty)
      price = Security::Price.find_by(date: date, security: security).price

      @account.holdings.create! \
        date: date,
        security: security,
        qty: qty,
        price: price,
        amount: qty * price,
        currency: "USD"
    end
end