Markowitz Diversification

Although there are no securities with perfectly negative correlation, almost all assets are less than perfectly correlated. Therefore, you can reduce total risk (?p) through diversification. If we consider many assets at various weights, we can generate the efficient frontier.

Although there are no securities with perfectly negative correlation, almost all assets are less than perfectly correlated. Therefore, you can reduce total risk (?p) through diversification. If we consider many assets at various weights, we can generate the efficient frontier.