Full Revaluation Approach
Full revaluation serves as an effective risk assessment approach for quantifying the potential risk exposure associated with a portfolio of derivatives. This method involves the comprehensive reassessment of the entire…
Sensitivity Analysis
It is a method used to assess the impact of variations or changes in input parameters, assumptions, or factors on the outcomes of a risk assessment, financial model, or decision-making…
Machine Learning for Portfolio Optimization-NCO
In recent years, machine learning (ML) techniques have gained popularity in the field of portfolio optimization. One ML-based method that has shown promise is the Nested Clustered Optimization Algorithm (NCO).…
Black-Litterman Model
The Black-Litterman asset allocation model provides a methodical way of combining an investor’s subjective views of the future performance of a risky investment asset with the views implied by the…
Modern Portfolio Theory – MPT
MPT - Modern Portfolio Theory (MPT), also known as mean-variance analysis, is a mathematical framework that aims to construct portfolios with maximum expected returns for a given level of risk.…
Portfolio Construction – Definition and Steps
Portfolio construction is the art and science of building a custom investment portfolio that meets your unique needs and goals. It's a process that involves carefully selecting and combining different…