Portfolio Optimization
Optimization helps you increase return and manage risk for your portfolio
Optimize your portfolio for better results
Portfolio optimization in a nutshell
Portfolio optimization matches your financial objectives and risk preferences with suitable investment opportunities. It improves your risk-return tradeoff and portfolio efficiency, so that you can create higher performing portfolios.
Giving you options and flexibility
We provide a number of optimization methods and settings suited to your investing needs. You can even save your optimal portfolios for later and benchmark them against the market. Do not worry if you are unfamiliar with the finance jargon. We also provide educational material to help you learn how to grow your portfolio.
Alter your portfolio for better performance
After optimizing, the optimal amount of shares are provided for each holding in your portfolio, so you can reallocate your holdings and obtain a better risk-adjusted return. However, optimization is not a one-time event. It needs to be done regularly to keep your portfolio in line with your financial goals and manage your portfolio’s risk.
Portfolio Optimization in Action
| Equally Weighted | Optimized by AdvancedPort | |
|---|---|---|
| Ending Portfolio Value | $22,940 | $24,480 |
| Expected Annual Return | 15.1% | 22.6% |
| Realized Annual Return | 14.7% | 22.4% |
| Risk | 8.7% | 6.6% |
| Sharpe Ratio | 1.6 | 3.1 |
Here are two simulated portfolios where we have invested a total of $40,000. Each portfolio contains the same stocks, but the optimized portfolio far outperforms the other.
Why does this matter? In this case, over 7% return is left on the table by not investing in an optimized portfolio, while the equally weighted portfolio has more risk without any additional return.
Explore other features from AdvancedPort
The tables and images above show portfolio statistics and other information. These are examples of how portfolio optimization and other investing tehcniques can improve portfolio performance. The results do not constitute investment advice or recommendation and are provided solely for informational purposes.