What does Optimize portfolio calculate?
Where to find it: ACCOUNTS and INVESTMENTS → Edit Allocation
From an account’s allocation page, select Optimize portfolio. For supported holdings with enough price history, this tool uses historical returns, volatility and correlations to calculate portfolio weights.
See To boldly go to the efficient frontier: portfolio rebalancing and optimization.
The form offers optimization methods such as maximum Sharpe ratio or minimum volatility for a specified return. Optional allocation and diversity constraints restrict the combinations it may use. The results show an efficient-frontier chart and the proposed changes in shares or units.
The chart’s highlighted portfolio belongs to the selected method and constraints. It does not establish what your portfolio will earn in the future. The tool uses a historical sample and does not include taxes or fees in this calculation. If no solution is found, the chosen return and constraints may be incompatible with the available holdings.
You can change the settings and calculate again, or explore a MOCK portfolio. Review the proposed trades in the context of the actual accounts rather than treating the result as an instruction to buy or sell.