Your SlideShare is downloading. ×
Portfolio Diversification Lowers Risk   Basics
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Portfolio Diversification Lowers Risk Basics

286
views

Published on


0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
286
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
4
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. PORTFOLIO DIVERSIFICATION LOWERS RISK Basics Inputs Portfolio Diversification Lowers Risk Standard Deviation 30.00% 30.00% Correlation Coefficient 40.00% Portfolio Standard Deviation 25.00% 20.00% 15.00% 10.00% 0 10 20 30 40 50 60 Number of Assets Outputs Number of Assets 1 2 3 4 5 6 7 Portfolio Std Dev 30.00% 25.10% 23.24% 22.25% 21.63% 21.21% 20.91% Minimum Std Dev 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97%
  • 2. s Risk 40 50 60 8 9 10 11 12 13 14 15 16 17 20.68% 20.49% 20.35% 20.23% 20.12% 20.04% 19.96% 19.90% 19.84% 19.79% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97%
  • 3. 18 19 20 21 22 23 24 25 26 27 19.75% 19.71% 19.67% 19.64% 19.61% 19.58% 19.56% 19.53% 19.51% 19.49% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97%
  • 4. 28 29 30 31 32 33 34 35 36 37 19.48% 19.46% 19.44% 19.43% 19.41% 19.40% 19.39% 19.38% 19.36% 19.35% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97%
  • 5. 38 39 40 41 42 43 44 45 46 47 19.34% 19.34% 19.33% 19.32% 19.31% 19.30% 19.29% 19.29% 19.28% 19.27% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97%
  • 6. 48 49 50 51 52 53 54 55 56 57 19.27% 19.26% 19.26% 19.25% 19.25% 19.24% 19.24% 19.23% 19.23% 19.22% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97% 18.97%
  • 7. 58 59 60 19.22% 19.21% 19.21% 18.97% 18.97% 18.97%