This page gives an example of efficient portfolio frontiers, constructed from ten large cap German stocks. The portfolio weights are obtained by optimizing the portfolio risk-return ratios. Each of the data points in the graph identifies a portfolio with a unique risk-return trade-off. The efficient portfolio frontiers links the set of portfolios that have the most optimal risk-return trade-offs, meaning for a target return the frontier portfolio has the minimal risk than the other portfolios, and for a given risk the frontier portfolio has the highest return. The efficient portfolio frontiers are for portfolios with short sales and without short sales constraint, respectively.
The global minimum variance portfolio can be identified from the graph with the yellow-colored data point.
|Efficient Portfolio Frontiers|