The equation for a 2 period multi-attribution analysis is:

R_A,2 = R_a,1(1 + R_b,2) + R_a,2(1 + R_p,1)

Where:
R_A,2 = the two-period active return
R_a,1 = active return for period 1
R_b,2 = return of the benchmark in period 2
R_a,2 = active return for period 2
R_p,1 = return on the portfolio for period 1

The equation shows that the two period active return for each attribute is found by taking its active return in the first period and compounding it at the benchmark rate of return over the second period and then adding this to the attribute’s contribution in the second period and compounding this with the portfolio return from the first period. This method would be repeated for each separate attribute in the portfolio such as security selection and market allocation. Then each separate attribution’s active return is added together to get the total active return for the portfolio.