How deeply does Investing for Programmers cover efficient frontier?

Defines frontier efficiency and demonstrates randomized portfolio calculations, stopping short of guaranteeing future performance.

Efficient frontier

As explained in Investing for Programmers

The efficient frontier is the set of portfolios that provide the highest expected return at each level of risk or the lowest risk at each expected return.

The efficient frontier is the set of portfolios offering the highest expected return for a given standard deviation, or the lowest risk for a given return. Diversification combines assets to balance return and variance rather than maximize return alone. section 7.6.1

Illustrative allocation

Using three years of data for seven stocks, the calculated allocation assigns 63.6% to NVDA, 29.3% to PFE, and smaller weights to the remaining assets. Historical estimates can change, so the result is a decision aid rather than a guarantee.

How Investing for Programmers covers it

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Also explained in

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Build a Robo-Advisor with Python (From Scratch)The efficient frontier is the set of portfolios offering the highest expected return for each level of risk or the lowest risk for each expected return.

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Related concepts

Markowitz-efficient portfoliohas part · A Markowitz-efficient portfolio is a portfolio on the efficient frontier that offers the highest expected return for a given risk or the lowest risk for a given return.
meanuses · A mean is a measure of central tendency, calculated as the arithmetic average of values or, for a random variable, as the probability-weighted average of its possible values.
minimum-variance frontierpart of · The minimum-variance frontier is the set of portfolios that achieve the lowest possible variance for specified expected returns when no risk-free asset is included.
portfolioproduces · A portfolio is a collection of assets, work, tools, or initiatives assembled or managed together for purposes such as evaluation, presentation, investment, or prioritization.
volatilityuses · Volatility is the degree or frequency with which a quantity, condition, or system varies or changes over time.

This explainer was generated by Manning's knowledge graph from the text of Investing for Programmers. The section links point to the parts of the book it draws on.