Portfolio Optimization using Markowitz Model

Portfolio Optimization using Markowitz Model

Name: Portfolio Optimization using Markowitz Model
Rating: 4.420382165605096 (51 reviews)

Instructor: Bekhruzbek Ochilov, MCSI, PAGRC

What you'll learn

Calculate covariance and correlation of two assets
Calculate variance and Sharpe ratio for two-asset portfolio
Use Markowitz model to optimize for the highest Sharpe ratio in two-asset portfolio
Understand what the efficient frontier is and how it is applied in portfolio management

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Taught in English

No downloads or installation required

Only available on desktop

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About this Guided Project

In this 1-hour long project-based course, you will learn how to optimize a two-asset portfolio at the optimum risk-to-return with finding the maximum Sharpe ratio. To achieve this, we will be working around the Sharpe ratios of two given assets, we will find the efficient frontier of these assets, and find where they intersect the best by utilizing the Markowitz Model.

The content of this course draws on the knowledge of Project: Compare Stock Returns with Google Sheets, so you are highly recommended to take it first if you are not familiar with how the Sharpe ratio is calculated and don’t have an understanding of how the risk-to-return metrics work. Note: This course works best for learners who are based in the North America region. We're currently working on providing the same experience in other regions. This course's content is not intended to be investment advice and does not constitute an offer to perform any operations in the regulated or unregulated financial market.

Learn step-by-step

In a video that plays in a split-screen with your work area, your instructor will walk you through these steps:

Project overview and importing the data (4 min)
Preparing data, calculating covariance and correlation (12 min)
Calculating Sharpe ratio for two-asset portfolio (10 min)
Graphing the results and discussing the outcomes (13 min)

Recommended experience

Knowledge of risk-to-return metrics (Sharpe Ratio), standard distributions, Google Sheets (formulas such as IF, STDEV, VAR)

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Instructor

Instructor ratings

4.0 (29 ratings)

Bekhruzbek Ochilov, MCSI, PAGRC

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How you'll learn

Skill-based, hands-on learning
Practice new skills by completing job-related tasks.
Expert guidance
Follow along with pre-recorded videos from experts using a unique side-by-side interface.
No downloads or installation required
Access the tools and resources you need in a pre-configured cloud workspace.
Available only on desktop
This Guided Project is designed for laptops or desktop computers with a reliable Internet connection, not mobile devices.