Identifying the volatility of your portfolio over your investment horizon and in relation to your goals is the first step. The next step is to reduce this volatility in the best possible way. And this is what drives an effective portfolio.
Eye on Correlation:
Correlation, simply put, is how two assets move in relation to one another.
expertGTC3 can be exploited to squeeze out the volatility from your portfolio
Is your portfolio pair-wise uncorrelated?
More rigorously defined, correlation is the relationship between two assets as they move about their respective averages. expertGTC3's Correlation function determines the relationships between any number of assets. expertGTC3's powerful correlation functionality is a key factor in its being able to calculate portfolio efficiency.
expertGTC3's Frontier function runs through millions of combinations (for example, there are 8,589,934,558 combinations for a universe of 33 securities) to arrive at the portfolio with the highest return for a given volatility, or equivalently, the lowest volatility for a given return. The engine makes use of an enhanced Markowitz mean-variance