Use Case

Efficient Frontier (MPT)

Steve Purves

#Modern Portfolio Theory (MPT)

Modern portfolio theory (MPT) is a theory on how risk-averse investors can construct portfolios to maximize expected return based on a given level of market risk. Harry Markowitz pioneered this theory in his paper "Portfolio Selection," which was published in the Journal of Finance in 1952.1 He was later awarded a Nobel Prize for his work on modern portfolio theory.

#Efficient Frontier

In this example, we have a customer report on how well they and balance their Unicorn Porfolio 🦄 to minimize their risks and see how possible portfolio choices compare to the individual stock positions. By doing this we can achieve a better return with lower risk that any individual stock.

This is done using the Efficient Frontier methodology.

This work is based on the notes of Ricky Kim which I continue to extend.