Efficient Frontier Portfolio Optimizer

The classic two-asset Modern Portfolio Theory problem: sweep every possible blend of two assets and watch where the risk-return frontier actually bends.

Reading This Tool

How To Use This Calculator

Enter the expected return and volatility for two assets, then set how correlated they are.

The curve plots every possible weighting between the two assets, from 100% Asset A through to 100% Asset B. The solid teal segment above the minimum-variance point is the efficient portion, the only part of the curve a rational investor should ever hold. Drag the weight slider to move your own portfolio along that curve.

Your Inputs

Asset A, Expected Return 6.0%

Asset A, Volatility (σ) 10.0%

Asset B, Expected Return 12.0%

Asset B, Volatility (σ) 22.0%

Correlation (ρ) Between A & B 0.30

Your Weight In Asset A 60%

Risk-Free Rate 4.0%

Two-asset portfolio math: portfolio variance depends on each asset's own volatility plus how they move together (correlation). Perfect negative correlation (ρ = -1) can theoretically eliminate risk entirely at the right weighting; perfect positive correlation (ρ = 1) offers no diversification benefit at all.

Your Portfolio

Expected Return

0.00%

Portfolio Risk (σ)

0.00%

Sharpe Ratio

0.00

Minimum-Variance Weight In A

Risk-Return Frontier, Every Blend Of A & B

Efficient Frontier Inefficient Segment Your Portfolio

This is the textbook two-asset case, used to teach how correlation drives diversification. Real portfolios hold many assets at once, which needs full covariance-matrix optimization, a genuinely harder numerical problem than this illustrates.

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