Portfolio optimization is a process that aims to find the best allocation to assets to invest in, given a set of constraints, such as risk tolerance, investment goals, and selected stock symbols. The goal of portfolio optimization is to maximize returns while minimizing risk.
There are several ways to calculate the optimum portfolio. Tools such as BloombergTM and ReutersTM terminal use a regression based algorithm and reach this result after several minutes of computation on their terminals. They also cost more than 2,000 USD per month and users are restricted to use the product only on the vendor authorised terminal and not within their devices and browsers.
Spotalpha uses the power of server-side computing and optimised proprietary algorithms to speed up calculations and reaches the same optimization result as other portfolio optimisers in less than a second. This make’s Spotalpha’s Portfolio optimiser much more powerful and affordable. Investors can now run sophisticated portfolio optimizations on their computers or even their mobile phone as many times as they would like without limitations.
It is important to note that portfolio optimization, just like any other analysis technique, is not fool proof and cannot guarantee returns or eliminate all risks. Investors should still exercise caution and do their due diligence when making investment decisions.
In summary, Spotalpha’s Portfolio optimizer provides users with an optimised portfolio, based on their selection of stocks and ETFs.
Getting Started with Portfolio Optimisation