Understanding Efficient Frontier

The Nobel Prize Winner Theory To Gain Higher Returns In Your Investment

Farhad Malik
Towards Data Science
9 min readAug 22, 2019

Question: What Is A Good Portfolio?

A good portfolio is more than a long list of good stocks and bonds. It is a balanced whole, providing the investor with protections and opportunities with respect to a wide range of contingencies. — Harry Markowitz

The Modern Portfolio Theory of Nobel prize winner, Harry Markowitz can be implemented by using optimisation routines.

“The theory provides a firm foundation for the intuition that you should not put all your eggs in one basket and shows investors how to combine securities to minimize risk” (Burton G. Malkiel).

Article Aim

This article will document the following three key points:

  1. Understanding Of Efficient Frontier
  2. A quick overview of SciPy package
  3. How efficient portfolios can be generated in Python?

Please read FinTechExplained disclaimer. This application is based on my opinions and they could be wrong. Always seek advice from a professional financial advisor before investing your money.

1. Let Me Introduce The Efficient Frontier

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Towards Data Science
Towards Data Science

Published in Towards Data Science

Your home for data science and AI. The world’s leading publication for data science, data analytics, data engineering, machine learning, and artificial intelligence professionals.

Farhad Malik
Farhad Malik

Written by Farhad Malik

My personal blog, aiming to explain complex mathematical, financial and technological concepts in simple terms. Contact: FarhadMalik84@googlemail.com

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