Tier 3 · AdvancedFree

Portfolio Theory

The Efficient Frontier

8 modules~51 min totalVerifiable certificate on completion

Syllabus

01Portfolio Variance and the Covariance MatrixMath
7 min
02The Efficient Frontier and Mean-Variance OptimizationMath
7 min
03Beta and the Capital Asset Pricing ModelMath
7 min
04The Efficient Frontier
6 min
05What Is Beta?
6 min
06The Three Factors
6 min
07The Correlation Matrix
6 min
08The Sharpe Ratio
6 min

From Module 1 — read a sample

Two stocks moving in OPPOSITE directions actually reduce each other's risk — like two kids on a seesaw balancing each other out. This is diversification in math form. The covariance matrix is just a scorecard that tracks how every pair of assets moves relative to each other, so we can calculate the true risk of holding them together.

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