Portfolio Diversification Tool

Optimize your investment portfolio by analyzing expected returns, weights, and diversification metrics.

About Portfolio Diversification

Portfolio diversification reduces risk by allocating investments across various assets. This tool calculates the expected portfolio return and risk (standard deviation) based on the expected returns and weights of individual assets. It assumes no correlation between assets for simplicity, but you can extend this by incorporating a covariance matrix in advanced analyses.

Input Fields

Provide the following details to analyze your portfolio:

• Number of Assets: The total number of assets in your portfolio (1-10).
• Expected Returns (%): The anticipated annual return for each asset (e.g., 10 for 10%).
• Portfolio Weights: The proportion of the portfolio allocated to each asset (e.g., 0.4 for 40%). Weights must sum to 1.
• Volatility (%): The standard deviation of each asset’s returns, representing risk (e.g., 15 for 15%).