The
Portfolio Forecast Model calculates the probable
future returns of a portfolio of stocks. It runs
thousands of concurrent simulations for all of the
stocks in a given portfolio. The thousands of simulated
price paths created by this process form the basis
for our Portfolio Forecast projections. From the
thousands of simulated outcomes,the Model calculates
the most likely return forecast.
An
extension of this Model is it’s Portfolio Optimization
feature which indicates the optimal fraction to
be invested in each stock and the corresponding
number of shares to be purchased. That is, it moves
the portfolio to a point on the Risk/Return frontier
where the portfolio's average historical return
is the highest among all those potential portfolios
with the same or lower risk.
