dallasflynn

[dallasflynn]

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@shell shockers online The complete formula for the variance of a portfolio’s return is:

𝑉
𝑎
𝑟
(
𝑃
𝑜
𝑟
𝑡
𝑓
𝑜
𝑙
𝑖
𝑜
)
=
𝑉
𝑎
𝑟
(
𝑎
𝑐
𝑡
𝑖
𝑣
𝑒
𝑟
𝑒
𝑡
𝑢
𝑟
𝑛
)
+
𝑉
𝑎
𝑟
(
𝑏
𝑒
𝑛
𝑐
ℎ
𝑚
𝑎
𝑟
𝑘
)
−
2
∗
𝑊
𝑒
𝑖
𝑔
ℎ
𝑡
𝑝
𝑜
𝑟
𝑡
𝑓
𝑜
𝑙
𝑖
𝑜
∗
𝐶
𝑜
𝑣
(
𝑎
𝑐
𝑡
𝑖
𝑣
𝑒
𝑟
𝑒
𝑡
𝑢
𝑟
𝑛
,
𝑏
𝑒
𝑛
𝑐
ℎ
𝑚
𝑎
𝑟
𝑘
)
Var(Portfolio)=Var(activereturn)+Var(benchmark)−2∗Weight
p
​
ortfolio∗Cov(activereturn,benchmark)

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