Portfolio Variance with Two Assets

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Jul 24, 2020, 6:28:07 PM

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Mar 26, 2020, 2:27:37 PM

P V = (A W 1^{2} \cdot A V 1 + A W 2^{2} \cdot A V 2) + 2 \cdot A V 1 \cdot A V 2 \cdot C V

$PV = (AW1^2 * AV1 + AW2^2 * AV2) + 2*AV1*AV2*CV$

(A W_{1}) Weight of asset 1

$(AW_1)"Weight of asset 1"$

(A V_{1}) Variance of asset 1

$(AV_1)"Variance of asset 1"$

(A W_{2}) Weight of asset 2

$(AW_2)"Weight of asset 2"$

(A V_{2}) Variance of asset 2

$(AV_2)"Variance of asset 2"$

(C V) Covariance of the two assets

$(CV)"Covariance of the two assets"$

$P V = (A W 1^{2} \cdot A V 1 + A W 2^{2} \cdot A V 2) + 2 \cdot A V 1 \cdot A V 2 \cdot C V$ $PV = (AW1^2 * AV1 + AW2^2 * AV2) + 2*AV1*AV2*CV$

where:

Related Calculators:

Dopson, Lea R., and David K. Hayes. Managerial Accounting for the Hospitality Industry. Hoboken, NJ: Wiley, 2009. Print.

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