Portfolio Optimization

Quote: “One size doesn’t fit all.” One can simulate all the stocks listed on NSE at a single go but all will not perform well.

Some stocks will respond nicely to the strategy and rest won’t.

We need to filter out the non-performing stocks.

A quick question: Do all the well-performing stocks have the same returns? No.

Some perform very well, some perform “only” well.

We would need to optimize the money allocation to different stocks so that out of the well-performing stocks, the best-performing stocks get the highest allocation and the lower well-performing stocks a bit less.

In very broad terms, this is what is called portfolio optimization.