{"id":"portfolio-selection","title":"Portfolio expected return and variance","summary":"A theory of portfolio analysis that considers relationships between asset movements as well as individual asset risks.","concepts":["Expected return: assumptions about future returns","Variance and covariance: variability and the degree of movement together","Efficient combinations: compare risk and expected-return alternatives"],"application":"When reviewing assets or exposures, examine concentration in common risk factors and the effects of estimation assumptions.","limitations":"Historical correlations are not guaranteed to persist. Variance does not describe every risk, and diversification does not eliminate losses.","directions":["Diversify risk: reduce concentrated exposure to particular factors.","Seek returns: record additional risk and estimation uncertainty together."],"category":"Accounting and finance","kind":"theory","kind_label":"Theory","persona_ids":["financial-analyst"],"revision":1,"updated_at":"2026-10-07T00:00:00.000Z","sources":[{"title":"Portfolio Selection","url":"https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.1952.tb01525.x","publisher":"Harry Markowitz · The Journal of Finance","edition":"1952, DOI 10.1111/j.1540-6261.1952.tb01525.x","region":"General financial theory","checked_at":"2026-10-07","reuse":"Independent editorial summary and source link; the original text is not republished."}],"review":{"status":"source-checked-editorial","expert_reviewed":false},"editorial_note":"Editorial English translation of the Korean edition. No professional translation or occupational expert review has been completed. Translation does not change the source jurisdiction.","language":"en","translation":{"status":"current","source_language":"ko","source_version":"kb-0af7e924fa6c2688","translated_at":"2026-10-09","professional_reviewed":false},"trust":"reference-data","version":"kb-b9d2c52af4527616","links":{"document":"/en/knowledge/portfolio-selection","markdown":"/en/knowledge/portfolio-selection.md","api":"/api/v1/knowledge/portfolio-selection?lang=en"}}