Mini-project
Banking & Fintech
Portfolio risk and return optimiser
Build a portfolio of Indian stocks that gets the best return for a given risk, and test it on later data.
The brief
Putting money in one stock is risky and putting it in ten random stocks is not much better. Using five years of daily prices, calculate returns, risk and correlations, build the efficient frontier, choose a portfolio, and test how it would have done in the following year. Good looks like: correct risk and return maths, an efficient frontier chart, and honest out-of-sample results compared with an index.
What you will build
- Choose 15 stocks across sectors
- Download daily prices and compute returns
- Estimate risk and correlation
- Build the efficient frontier
- Pick minimum-risk and maximum-Sharpe portfolios
- Test on the next year against the Nifty 50
Free, open data to build it with
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