Project: AI-Driven Portfolio Optimization #
The Challenge #
An investment firm struggled with portfolio imbalance—their strategy couldn’t balance high returns with manageable risk!
The Solution #
Using Python and Modern Portfolio Theory, I built an optimization engine that:
🚀 Achieved 23% better Sharpe ratio than traditional portfolios
📊 Simulated 10,000+ portfolio combinations to find the efficient frontier
How It Works #
Market Alchemy: Analyzed 1 year of data for TSLA, GOOGL, AMZN, and BRK-B Risk-Reward Sorcery: Calculated volatility, correlations, and Sharpe ratios Optimal Blending: Automated weight allocation
Key Discoveries #
🔥 GOOGL-AMZN show 0.52 correlation (higher risk/reward synergy)
🛡️ BRK-B acts as portfolio stabilizer with low volatility
📉 Golden Cross Detection: 50-day vs 200-day MA signals
See the Magic Explore the code and datasets on GitHub
How I Engineered a 23% Superior Portfolio Using Python & Modern Portfolio Theory #
Chapter 1: Gathering the Ingredients #
Every great potion begins with quality ingredients. I harvested:
1 year of market data for TSLA, GOOGL, AMZN, and BRK-B
50,000+ data points of OHLC prices and volumes
Precision tools: Pandas for data wrangling, yfinance for live feeds
Chapter 2: The Volatility Crucible #
Raw data is wild magic - I tamed it with:
50-day & 200-day Moving Averages revealing TSLA’s mood swings
Daily return distributions showing AMZN’s kurtosis (fat tails)
Volume spikes analysis predicting BRK-B’s quiet strength
Chapter 3: The Correlation Crystal Ball #
I discovered hidden relationships through:
Heatmap sorcery showing GOOGL-AMZN’s 0.52 correlation
Covariance matrices proving BRK-B’s diversification power
Chapter 4: The Efficient Frontier Quest #
10,000 simulated portfolios revealed:
Maximum Sharpe Ratio of 2.29 (23% better than S&P 500)
Optimal weights: 17.8% AMZN, 5.4% TSLA, 15.3% GOOGL, 61.5% BRK-B
Maximum Sharpe Return of 33%
Risk-return sweet spot at 15% volatility
Chapter 5: The Golden Portfolios #
Three elixirs of optimal performance emerged:
18.5789 AMZN, 5.1455% TSLA, 15.8968% GOOGL, 60.3789% BRK-B
16.6440%AMZN, 5.3499% TSLA, 14.6621% GOOGL, 63.3440% BRK-B
17.8025% AMZN, 5.3034% TSLA, 15.3061% GOOGL, 61.5880% BRK-B
