Two Asset Portfolio Optimization

Using the Markowitz Model, I have created a portfolio optimization of VOO(Vanguard 500 Index Fund ETF) and BLV(Vanguard Long-Term Bond Index Fund ETF).

First, all the data was compiled from 2011 to 2019 for every month. The Growth Percentage was calculating looking at the adjusted close per month. The adjusted close is a more accurate representation as it takes into consideration stock splits and dividends.

After taking the Growth Percentage, the mean, variance, standard deviation and sharpe ratio was calculated of both assets. The Sharpe ratio was taken by

Sharpe Ratio = (Expected Return of Portfolio - Risk Free Rate) / Standard Deviation of Portfolio

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