Apply the markowitz model to construct an optimal portfolio.... | Filo

MacroGlide on Instagram: "In Markowitz’s Portfolio Theory, correlation explains how assets move relative to each other and why diversification works. If two assets are highly positively correlated, they tend to rise and fall together, offering little risk reduction when combined. If they are weakly correlated or negatively correlated, losses in one asset can be partially offset by gains or stability in another, lowering overall portfolio volatility without necessarily reducing expected return. M

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