Calculating Allocation for Minimum Risk Portfolio

A minimum risk portfolio is an investment strategy designed to achieve the lowest possible risk level. Using Your Portfolio UniverseTM, the minimum risk portfolio (MVP) is indicated by the left most point on the graph:

investors seeking to minimise portfolio volatility can leverage Diversiview's Minimum Risk Portfolio (MVP) optimisation

Risk-averse investors seeking to minimise portfolio volatility can leverage Diversiview’s Minimum Risk Portfolio (MVP) optimisation. This guide will walk you through calculating your MVP and unlocking valuable insights to make informed investment decisions.

  • Before optimising, run a portfolio analysis (click here for in-depth guides).
Create a new portfolio to analyse and optimise in Diversiview.
  • From your Portfolio Analysis Report, scroll down to reveal the Table of Contents.
  • Click “Minimum Volatility Portfolio (MVP)” under “Your Portfolio Options” in the right column. This will display the minimum risk portfolio within Your Portfolio UniverseTM.
Find the minimum risk portfolio by clicking the 'Minimum Volatility Portfolio (MVP)' button in Diversiview
  • Click on ‘Calculate Minimum Risk Portfolio’.
  • You will be prompted with a dialogue box indicating that this optimisation will cost 10 credit points. Click ‘OK’ if you wish to continue.
Calculate the minimum risk portfolio (minimum volatility portfolio) in Diversiview
  • Before you run the optimisation, you can select you weighting constraints. Here you can choose your maximum and/or minimum weighting constraints.
  • For example, if you don’t want to hold more than 40% in any investment, move the max weight slider to 40%. Similarly, if you don’t want to hold less than 2% in any investment, move the min weight slider to 2%.
  • Click ‘Calculate’ once you are happy with your selection.
Calculate the minimum risk portfolio allocation with your preferred weighting constraints in Diversiview.
  • Within a few minutes, your personalised optimal portfolio analysis report will be ready for viewing on your Diversiview dashboard. This report offers valuable insights into your portfolio’s asset allocation, risk profile, and potential areas for improvement.

By following these steps and exploring the additional resources provided, you’ll be well on your way to making informed investment decisions.