Graph The Efficient Frontier And Capital Allocation Line In Excel

Graph The Efficient Frontier And Capital Allocation Line In Excel by Ryan O'Connell, CFA, FRM

Chapters:
0:00 - Download Historical Data from Yahoo Finance
0:42 - Calculate Returns from Historical Prices
1:08 - Calculate Asset's Average Return, Standard Deviation, and Covariance
2:18 - Assign Portfolio Weights
2:56 - Calculate Portfolio Expected Return
3:27 - Calculate Portfolio Standard Deviation
5:03 - Calculate Portfolio Sharpe Ratio
5:47 - Graph the Efficient Frontier
6:40 - Graph the Capital Allocation Line (CAL)

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*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC

[RyanOConnellCFA]

💾 Download Free Excel File:

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► Join me for personalized finance tutoring tailored to your goals:

[shiyaohong]

very student from IMPERIAL COLLEGE BUSINESS SCHOOL

[sahyjuf]

Great explanation and easy to understand! Thank you!

[massoudbayati]

Thanks. great. Could you please provide training for multiple-asset portfolio rather than two asset.

[jmnew]

Great Video
It helped a lot!
One single question:
Where du you take the risk free interest rate from ?
Current 3m, 2y or 10y US treasury bond yield ?

[Rasamandrice]

Really cool content man! I tweaked this slightly and used the Excel Solver to find the optimal weights.

[mauropires]

Very cool! You save my college work XD

[jasonl]

Perfect, I downloaded the excel spreadsheet and noticed in the video the sharpe ratio was different. This is just because the risk-free rate was not locked with F4 if anyone also wondering what is different, cheers Ryan! This has helped me a lot with my financial understanding.

[anastasioskondo]

you're a good guy brother! thanks for the help

[pacmanrocks]

Great content as always. I highly recommend using Excel without a mouse as that will separate you further from the rest. Cheers.

[agustinamenabar]

Very usefull man! Greetings from Chile

[mcpeinventors]

I found this channel a week ago, and absolutely love it. Keep em coming Ryan!

[jesperhjort]

Hey. Great video. One question though. Why not use the solver to find the optimal portfolio allocation? It seems like you randomly pick the portfolio weights and then just assume that the best allocation in your sample by definition is the optimal portfolio.

[Zenttt]

how to know the risk free rate for 12 month in 1 year? and is correlation is same as risk free rate?

[chadieltahan]

Many thanks Ryan for the informative content! I am CFA level I candidate and just studying this material in Portfolio Management. I am also planning to take a financial modelling course between level l and level ll. Any specific course you recommend? And what could be the specific job titles that are mainly focused on creating financial models such as this one? Thanks again.

[marvellousproductions]

Hey Ryan, thanks so much for sharing it is really helpful ! I have one question though, as I can see the intercept on the y axis is not with the value of your risk free asset. When I tried to plot mine, I get a small graph of the frontier and a a really large line. This is I guess because my risk free rate is really small so it produces a really unbalanced graph that is not readable without extremely enlarging it. I just wanted to ask if you did any other steps before in tour settings or something in order to get such a visible graph. Thank you:)

[lucagiussani]

Great video Ryan! Can you do it with a 10 assets portfolio? How to set the weights?
Thank you

[SaheliChakraborty-hh]

I am watching from India and this is the best process and detailed evaluation.... I have seen everafter ❤

[stefanosmiltiadou]

Why do you choose population variance formula insted of sample population formula?

[financialchimes]

Should you use the geometric mean or the simple average? And why? The geometric mean would be a more realistic long term return.