Learn how to visualise the Efficient Frontier in Excel and optimise a portfolio using combinations of assets. In this step-by-step tutorial, we cover: how to calculate daily returns for multiple assets, annualised return and volatility formulas in Excel, building the variance-covariance matrix, running portfolio simulations with random weights, calculating portfolio risk & return using MMULT & SUMPRODUCT. By the end of this video, you'll better understand how diversification reduces risk, how different asset correlations affect portfolio stability and how investors can identify the optimal portfolio mix.
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 template to substitute financial advice. Make sure you talk to your own accountant before you use this template to make any financial decisions.
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[email protected]Overview: (0:00)
Daily Returns in Excel: (1:18)
Expected Return & Volatility: (1:55)
Variance-Covariance Matrix: (3:23)
Portfolio Simulations: (5:42)
Portfolio Risk & Return: (6:57)
Visualising the Efficient Frontier: (8:18)