This document presents an analysis of the efficient frontier for a portfolio containing five stocks: Infosys, ICICI Bank, Ashok Leyland, Adani SEZ, and Canara Bank. Ten years of historical return data for these stocks was collected from the NSE website and used to calculate the mean, standard deviation, and variance of each stock. Portfolios X and Y were created by assigning different weights to the five stocks. The mean, variance, covariance, and correlation of the two portfolios were then calculated. By varying the weights and calculating the corresponding mean returns and standard deviations, an efficient frontier curve was obtained showing the highest possible returns for different levels of risk.

1. EFFICIENT
FRONTIER
Portfolio Management
Presenters:
Group: 2
Name Registration Number
Vishakha Gupta 21PGDM096
Aditya Mondal 21PGDM102
Arka Guha 21PGDM115
Dipayan Ghosh 21PGDM124
Karishma Agarwal 21PGDM134
Moquarim Akhter 21PGDM141
Sonali Bhandari 21PGDM178

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Explanation of The Dataset
We have selected the following stocks in our portfolio: 1. Infosys
2. ICICI Bank
3. Ashok Leyland
4. Adani SEZ
5. Canara Bank
To calculate the efficient Frontier of the portfolio we
used the 10 years of historical data on the returns of
these stocks.
The historical data for the years 2011 to 2021 was
collected from the NSE website.

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An efficient frontier is a set of investment portfolios that are expected to provide the highest returns
at a given level of risk. A portfolio is said to be efficient if there is no other portfolio that offers
higher returns for a lower or equal amount of risk. Where portfolios are located on the efficient
frontier depends on the investor’s degree of risk tolerance.
Efficient Frontier
5%
7%
9%
11%
13%
15%
30% 40% 50% 60% 70% 80%
Mean
return
Standard deviation
Portfolios x, y and the Four Stocks
Stock
The efficient frontier is a curved
line. It is because every increase in
risk results in a relatively smaller
amount of returns. In other words,
there is a diminishing marginal
return to risk, and it results in a
curvature.

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Steps in Excel
 First the Historical Returns of the five stocks are taken from the NSE
website and their mean, standard deviation & variance are calculated.
 Following that the excess return matrix is created in respect to the mean
returns of the stocks.
 Next we have created the variance covariance matrix by multiplying the
excess return matrix with its transpose.
 Following to that weights are assigned for the five stocks separately for
Portfolio X & Y
 The mean, Variance, Co-variance and the correlation of the two portfolios
are calculated.
 The return combinations are calculated for the portfolio with the mean
return and the standard deviation.
 Finally the portfolio is calculated in respect to different weights and the
efficient frontier curve is obtained.

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Data Interpretations
The efficient
frontier curve is
obtained in respect
to the five stocks.

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