introduction to portfolio management
DESCRIPTION
TRANSCRIPT
Portfolio Management
PORTFOLIO
“It is not enough to invest in many securities, it is necessary to have the
right securities”
Covariance
OR
Coefficient of correlation
Risk and return features of an individual asset
Risk and return of a portfolio
Portfolio analysis and selection
An investor should follow two criteria
Selection of Optimal Portfolio
Traditional Portfolio Analysis
Mean vs. Expected
Expected Return of a Portfolio
Portfolio effect in the two securities case
Markowitz diversification and classification of risks
Risk of Portfolio (p)
The Dominance Principle
Dominance Principle Example
B. Diversification
Risk
Diversification
Random Diversification and Efficient Diversification
3. Markowitz Diversification
3. Markowitz Diversification (continued)
3. Markowitz Diversification (continued)
3. Markowitz Diversification (continued)
Perfect Positive Correlation
Perfect Positive Correlation (continued)
Perfect Positive Correlation (continued)
Zero Correlation
Zero Correlation (continued)
Negative Correlation
Negative Correlation (continued)
Example
Markowitz Diversification
CRUX
Example to clarify shapes of curves