Investment Portfolio Calculator

Optimize your asset allocation, calculate portfolio risk and returns, and plan rebalancing strategies. Includes modern portfolio theory and diversification analysis.

Investment Portfolio Calculator

Optimize your asset allocation, calculate portfolio risk and returns, and plan rebalancing strategies.

Portfolio Settings
Portfolio Summary
7.4%
Expected Return
8.5%
Portfolio Risk
0.52
Sharpe Ratio
Moderate
Risk Level
Asset Allocation
Adjust your asset allocation percentages (should total 100%)
US Stocks
$40,000
40% of portfolio
International Stocks
$20,000
20% of portfolio
Bonds
$30,000
30% of portfolio
Real Estate
$10,000
10% of portfolio

How to Use This Calculator

  1. Enter your total portfolio value
  2. Set your risk tolerance and time horizon
  3. Adjust asset allocations (stocks, bonds, real estate, etc.)
  4. Set expected returns and risk levels for each asset
  5. Choose your rebalancing frequency
  6. View portfolio metrics and risk analysis
  7. Review recommendations for optimization
How the Calculation Works

Portfolio Return Calculation

1. Weighted Average Return = Σ(Asset Weight × Asset Return)

2. Asset Weight = Asset Value ÷ Total Portfolio Value

3. Portfolio Return = Sum of all weighted returns

4. Expected Annual Return = Portfolio Return × 100%

Risk Metrics

1. Portfolio Risk (Volatility) = √(Σ(Weight² × Risk²) + Σ(Weight × Weight × Risk × Risk × Correlation))

2. Sharpe Ratio = (Portfolio Return - Risk-Free Rate) ÷ Portfolio Risk

3. Maximum Drawdown = Portfolio Risk × 2.5 (simplified)

4. Risk Level Classification:

• Conservative: < 8%

• Moderate: 8-12%

• Aggressive: 12-18%

• Very Aggressive: > 18%

Asset Allocation

1. Total Allocation = Sum of all asset percentages

2. Target Allocation = 100% (balanced portfolio)

3. Rebalancing Needed = |Current Allocation - Target Allocation| > 5%

4. Asset Value = Total Portfolio Value × (Asset Allocation ÷ 100)

5. Diversification Score = 1 - (Largest Asset Weight)²

Portfolio Optimization

1. Efficient Frontier = Optimal risk-return combinations

2. Risk-Adjusted Returns = Return per unit of risk

3. Correlation Impact = Lower correlation reduces portfolio risk

4. Rebalancing Frequency = Annual, quarterly, or monthly

5. Time Horizon Impact = Longer horizons can tolerate more risk

Important Notes:

  • This calculator uses simplified risk calculations for educational purposes
  • Actual portfolio performance may differ from expected returns
  • Consider consulting a financial advisor for personalized investment advice
  • Past performance does not guarantee future results
  • Diversification helps reduce risk but does not eliminate it

How Investment Portfolio Calculator Works

This calculator helps you optimize your asset allocation and understand portfolio risk and returns using modern portfolio theory.

Portfolio Return = Σ(Asset Weight × Asset Return)

Weighted average return based on your asset allocation.

Portfolio Risk = √(Σ(Weight² × Risk²) + Σ(Weight × Weight × Risk × Risk × Correlation))

Portfolio volatility considering asset correlations and weights.

Sharpe Ratio = (Portfolio Return - Risk-Free Rate) ÷ Portfolio Risk

Risk-adjusted return measure. Higher is better.

Asset Weight = Asset Value ÷ Total Portfolio Value

Percentage of portfolio allocated to each asset.

Maximum Drawdown = Portfolio Risk × 2.5

Estimated maximum potential loss in a severe market downturn.

Diversification Score = 1 - (Largest Asset Weight)²

Measures how well diversified your portfolio is.

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