We cover how to visualise the return distribution in an investment portfolio by creating a histogram for each of the assets. Understanding the return distribution of a portfolio is essential for making informed investment decisions. It tells you whether your portfolio is skewed towards high risk, high reward assets, concentrated around steady, predictable returns or experiencing excessive volatility. A histogram is a type of chart that can help with this. In simple terms, it groups data into intervals and displays how frequently each interval occurs.
DISCLAIMER: Although I have taken great care to check all of the calculations, I am not a qualified accountant or financial advisor and you should not use this video to substitute financial advice. Make sure you talk to your own accountant or advisor before you use this information to make any financial decisions.
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[email protected]Overview: (0:00)
Calculate Returns: (1:25)
Produce Histograms: (1:50)
Interpretation: (3:40)