Minimum-variance frontier

Minimum-variance frontier,

Definition of Minimum-variance frontier:

  1. The minimum amount of volatility of stocks within any given portfolio, according to Markowitzs Modern Portfolio Theory. This is illustrated by a graph with each stock consisting of a data point that indicates its level of risk; ideally a well-balanced portfolio has enough diversification that the risk of one particular stock will be offset by the rest of the portfolio.

Meaning of Minimum-variance frontier & Minimum-variance frontier Definition