If an asset is 'left out' and not included in optimized portfolios, the reason is either:
- the asset has insufficient history; three years of history are necessary to calculate the asset beta, which in turn is used to make the forward projection. The assets with insufficient history are listed in red at the bottom of the assumptions window.
- The risk/return characteristics of the asset are less desirable than other assets. Click on positions button in the frontier chart to display the relative risk/return merits of the assets. You may also change the expected return of the asset. Note that if the expected return is increased, the asset is more likely to be included in the efficient portfolio.
- The diversification benefits of the asset are minimal, i.e. it has a high correlation with other assets in the portfolio. Click on the Correlations tab to display the correlation table for all assets. Select the column representing the asset to observe the correlation of the asset with the other portfolio assets.