Planetary boundary layer (PBL) Planetary boundary layer (PBL), also called atmospheric boundary layer, the region of the lower troposphere where Earthâs surface strongly influences temperature, moisture, and wind through the turbulent transfer of air mass.
Portfolio optimization tools are useful to assist planners, advisers, and clients in ways to conceptualize the asset allocation problem. But, they should not be relied upon as the primary tool for structuring an investment portfolio.
Modern portfolio theory says that portfolio variance can be reduced by choosing asset classes with a low or negative correlation, such as stocks and bonds. This type of diversification is used to reduce risk. Portfolio variance = (weight(1)^2*variance(1) + weight(2)^2*variance(2) + 2*weight(1)*weight(2)*covariance(1,2).