The process of distributing investments across various asset classes to balance risk and return.

A risk management strategy that mixes a wide variety of investments within a portfolio.

Evaluating the potential return of an investment relative to its risk, guiding informed decision-making.

A framework for constructing portfolios to maximize expected return for a given level of risk.

A curve representing optimal portfolios that offer the highest expected return for a defined risk level.

A line that represents the risk-return trade-off of efficient portfolios in the capital market.

A statistical measure that estimates the potential loss in value of an asset or portfolio over a defined period.

A process of analyzing possible future events by considering alternative outcomes.

Metrics used to evaluate the success of an investment strategy against predefined objectives.

A measure of return that considers the risk taken to achieve that return, allowing for better investment comparisons.

The degree to which two asset prices move in relation to each other, influencing diversification benefits.

The risk of extreme price movements in financial markets, often underestimated in standard models.

The process of assessing the effectiveness of an investment strategy based on predetermined metrics.

A long-term investment strategy that sets target allocations for various asset classes.

A short-term investment strategy that actively adjusts asset allocations based on market conditions.

Past data used to analyze the performance of investments and inform future decisions.

Investment management where decisions are made at the discretion of the portfolio manager.

The inherent risk associated with the entire market or market segment, not diversifiable.

The risk specific to an individual asset or company, which can be mitigated through diversification.

The degree of variation of trading prices over time, often measured by the standard deviation.

A model that describes the relationship between risk and expected return, used for asset pricing.

A measure of an investment's performance relative to a benchmark index, indicating excess return.

A measure of an asset's volatility in relation to the overall market, indicating systematic risk.

The peak-to-trough decline during a specific period for an investment, indicating risk exposure.

The process of realigning the weightings of a portfolio to maintain desired asset allocation.