Minimum-Variance Portfolio

Minimum-Variance Portfolio - Minimum-Variance Portfolio is the portfolio of individually risky assets that when taken together, result in the lowest possible risk level for the rate of expected return. Such a portfolio hedges each investment with an offsetting investment; the individual investor's choice on how much to offset the investments depends on the level of risk and expected return willing to accept. The reserves in a minimum variance portfolio are individually riskier than the portfolio as a whole. The names of terms come from how to mathematically express the outcome. It is the volatility replacement for the risk, and correlation to an investment.