I am attempting to build an optimal portfolio using the Black-Litterman model and the Efficient Frontier concept. I aim to merge market data with personal viewpoints on expected stock returns, creating a balanced blend of market consensus and individual perspective.
The goal is to incorporate market equilibrium returns with personal beliefs about future stock performance. The result is a set of optimized returns that harmonize market consensus with personal insights.
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Data Collection: The project begins with the gathering of historical stock data using yfinance for a predetermined set of ticker symbols.
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Data Processing: The raw data undergoes transformation into essential statistics and indicators, serving as the foundation for further analysis.
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Black-Litterman Model: The centerpiece of this project is the Black-Litterman model, enabling me to incorporate personal views about the expected returns of each stock. This addition gives a unique personal flavor to the portfolio optimization process.
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Efficient Frontier: The concept of the Efficient Frontier is employed to identify the optimal portfolio. This portfolio offers the highest expected return for a defined level of risk, or the least risk for a given level of expected return.
This project is licensed under the MIT License.