CHAPTER 14
Constructing a Portfolio of Funds
There is a debate within investment organizations as to whether portfolio construction is an art or a science. Let's explore this through the analogy of the golden ratio. The classical Greek mathematicians Euclid and Pythagoras are credited with discovering the golden ratio. Artists throughout the ages (especially the Greeks and Renaissance artists) believed the golden rectangle, based on the golden ratio, to be the most visually appealing shape and have used it in many of the great pieces of art. For example, during the Renaissance, Leonardo da Vinci made wide use of the shape. The artistic application of mathematical theory enabled these great works of art to be created. The same is true in the construction ...
Get Hedge Fund Risk Fundamentals: Solving the Risk Management and Transparency Challenge now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
