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Wealth Management

Portfolio Optimization

Portfolio Optimization is an attempt to create the optimal capital weightings among a variety of investments that give the highest rate of return for the least amount of risk. There are a number of tools available to help achieve this objective. Alpha is one of five technical risk ratios: The others are beta, standard deviation, R-squared, and the Sharpe ratio. These are all statistical measurements used in modern portfolio theory (MPT). All of these indicators are intended to help investors determine the risk-reward ratio of a particular portfolio.

Wealth Management