Three-Stock Portfolio Efficient Frontier

Put in your mean / risk / correlation → generate 1000 portfolios (dots + table) and the efficient frontier (line).
Stock Data Fetcher
Use this tool to fetch stock data (ticker + date range) and calculate monthly returns.
Open Stock Data Fetcher
If the link doesn’t open, copy/paste this URL into Chrome:
https://script.google.com/macros/s/AKfycbxao_yHFToaMAs2fuEiYMfHapioFAjIukvBAFyJIOS6ccYL2WAepMMyrO8afpRjsVBA/exec
Dots: 0
Frontier points: 0
Min Risk σ (%): —
Max Return (%): —
Blue dots = random portfolios. Red line = efficient frontier (best return for each risk level).

Portfolio Returns and Risks (All Random Portfolios)

Stock 1 Weight (%) Stock 2 Weight (%) Stock 3 Weight (%) Expected Return (%) Risk (Standard Deviation %)

Why This Graph Matters

Imagine you're making a cocktail. Each stock is an ingredient. The way these ingredients mix together (correlation) determines whether your portfolio is smooth and balanced (lower risk) or a risky disaster (higher risk).

How Portfolio Return Works

Your portfolio’s return is the combined return of all stocks you choose, weighted by how much you invest in each one.

Why Correlation is Important

- Low correlation helps reduce risk, making your portfolio more stable.
- High correlation increases risk, as all stocks move together.
- Negative correlation provides the best diversification, balancing gains and losses.

How Correlation Affects Risk

Your portfolio's risk depends on three things: 1) the risk of each individual stock, 2) how much of each stock is included, 3) how the stocks move relative to each other (correlation).

The lower the correlation, the better the diversification and risk reduction.

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