Risk-Constraint Layer (Restricted Selection Analogy)
In portfolio construction, maximizing returns alone is insufficient. Risk constraints ensure long-term survival and resilience.
Optimization Objective
Maximize Σ Ws(t) · DSIs(t)
Subject to Risk Constraints
Volatility ≤ Threshold
Sector Exposure ≤ Cap
Drawdown ≤ Limit
Sector Exposure ≤ Cap
Drawdown ≤ Limit
Interactive Risk-Constrained Portfolio Evaluator
Portfolio Objective Inputs
| Stock | Ws(t) | DSIs(t) |
|---|
Interpretation:
Only portfolios satisfying all constraints are valid, mirroring restricted selection in breeding.
Only portfolios satisfying all constraints are valid, mirroring restricted selection in breeding.
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