Portfolio Theory: How Diversification Reduces Risk Through Math скачать в хорошем качестве

Portfolio Theory: How Diversification Reduces Risk Through Math

Why does combining assets into a portfolio produce better risk-adjusted returns than any single stock? This video walks through the mean-variance framework — the foundational tool of modern portfolio management — and shows exactly why diversification works, not as a vague principle, but as a mathematical certainty driven by correlation. Using real historical data from assets like Motorola, Merck, McDonald's, GM, and the S&P 500, we build the risk-return map, define dominance versus tradeoff, and reveal how the efficient frontier curves northwest into territory no individual asset can reach alone. Key concepts covered: • The mean-variance framework: evaluating investments on expected return and standard deviation • The risk-return scatter plot: mapping real assets on two dimensions • Dominance vs. tradeoff: when one asset clearly beats another vs. when risk tolerance decides • The efficient frontier: why portfolios curve northwest beyond individual assets • Correlation as the engine of diversification — not the number of holdings • Idiosyncratic risk vs. systematic risk in sector-focused portfolios • Why portfolio contribution matters more than standalone merit • Historical data limitations: process over prediction --- ORIGINAL SOURCE This video distills concepts from a longer lecture. Source video:    • Ses 13: Risk and Return II & Portfolio The...   Full credit to the original author and lecture series. --- About Ludium Learn. Play. Discover. Ludium distills long lectures into focused concept videos, making complex ideas accessible without sacrificing rigor. GitHub: https://github.com/Augustinus12835/au... #PortfolioTheory #MeanVariance #Diversification #EfficientFrontier #RiskReturn #ModernPortfolioTheory #InvestingEducation #FinancialLiteracy