Mean-Variance Optimization

Mean-Variance Optimization is a financial strategy used to create a balanced investment portfolio. It helps investors choose a mix of different assets (like stocks and bonds) to achieve the best possible returns for a given level of risk. The "mean" refers to the expected returns, while "variance" measures the risk or volatility of those returns. By analyzing these factors, investors can find an ideal combination that maximizes returns while minimizing risk, essentially helping them to make informed decisions about where to allocate their money for optimal performance.