Portfolio optimization is a multiple objective problem that uses Mean-Variance Optimization. This mathematical technique was pioneered by Harry Markowitz in the early 1950s and was published in 1952 by the Journal of Finance. Implemented using Mean-Variance Optimization, his theory of portfolio allocation to this day is the most successful applications of quantitative finance. The main aspect of this concept is asset diversification. If all the assets of a portfolio move together and have similar risk, the portfolio volatility will simply be equal to the weighted average of the individual asset volatilities. Therefore, the main objective of Portfolio Optimization is the process of selecting assets that complement one another on the basis of volatility and market movement. Mean-Variance Optimization to achieve desired asset allocation was used by institutional investor and money managers for many years and recently became of interest to mainstream investors around the world due to the affordable access to global markets provided by the internet. What is Macroaxis Five Star Portfolio Optimization technique?

The Four Star Portfolio Optimization technique refers to the simple methodology we use to achieve better diversification. Using the Portfolio Optimization Module, you can evaluate the One-Day Value At Risk of the optimal portfolio along with total risk, expected return, and efficiency (Sharpe) ratio. The model picks the optimal portfolio from the efficient frontier given your specified level of risk, and a set of constraints on weight and return. The resulting portfolio is then compared to your existing portfolio. As a rational investor, your main objective is to outperform your existing portfolio in all 4 categories. For each category in which you outperform your existing portfolio, you will get one star. The best optimization is achieved when, after several iterations, you get all five stars.