Portfolio Optimizer – Build Stock & ETF Portfolios by Risk
Use this portfolio optimizer and portfolio risk calculator to build a diversified stock and ETF portfolio based on your risk tolerance.
Select your universe, add tickers, and choose your desired risk level to generate an optimized allocation.
Portfolio Universe
Select one or more universes to define the stock pool. The optimizer will choose up to 10 stocks from this pool that best match your selected risk.
Ticker Selector
No tickers selected. Add tickers below.
Optionally add specific tickers you want considered. If you add more than 10, the optimizer will pick the best 10 based on risk and diversification.
Risk Bucket
6Presets adjust the risk level — you can fine-tune using the slider.
Moderate-Aggressive - Higher growth potential
Adjust your risk level. Higher risk means more growth-oriented and concentrated portfolios; lower risk means more diversification and stability.
Run optimizer & review portfolio – the optimizer will pick up to 10 stocks from your selection based on risk.
How the Portfolio Optimizer Works
The Stock Portfolio Optimizer does portfolio optimization for you: it builds an optimized portfolio that matches your chosen risk level (1–10). It uses historical volatility and correlations between your selected stocks and ETFs to assign weights that balance expected return with risk, while respecting position and sector caps. You pick a universe (or custom tickers), set your risk level, and the optimizer suggests an allocation; you can then tweak weights manually and see metrics update in real time.
This tool helps you build a diversified portfolio and optimize your stock portfolio without guessing weights—the algorithm enforces diversification and concentration limits so the result is realistic and aligned with your risk preference.
Step-by-Step Instructions
- Select a portfolio universe (or add custom tickers) that matches your investment focus.
- Add stocks or ETFs; you can use equal weight to start or leave the optimizer to suggest weights.
- Choose a risk level (1–10) using the slider or presets (Conservative, Balanced, Aggressive).
- Click Optimize (or let the tool run) to view your optimized allocation and metrics (volatility, expected return, Sharpe, etc.).
- Adjust weights manually if desired; the optimizer will rebalance the rest. Export or share your portfolio via URL when done.
For more detail, see How to Use and How It Works.
Example Optimized Portfolios
Conservative (risk 2–3): Many smaller positions, broad sector spread, lower volatility. Example outcome: in a bad year the portfolio might fall ~10–15%. Balanced (risk 5–6): Mix of growth and stability, moderate concentration. Example outcome: drawdowns often in the 15–25% range in a severe bear market. Aggressive (risk 8–9): Fewer, larger positions, more sector tilt (e.g. technology). Example outcome: volatility and drawdowns can be 25–40%+; suited to long horizons only. Try different risk levels in the tool above to see how the allocation and metrics change.
FAQ
How do I use the optimizer?
Select a universe or add tickers, set your risk level (1–10), and run the optimizer. It will suggest weights that match that risk while keeping diversification and concentration within limits. You can then edit weights manually and see metrics update. Use the Build page (this page) to get started; no signup required.
Can I optimize for ETFs?
Yes. You can add ETFs to your universe and optimize a portfolio that includes both stocks and ETFs. The optimizer treats them like any other holding—it uses their historical behavior and correlations to assign weights that match your risk level.
What does the optimizer consider?
Historical volatility, correlations between holdings, your chosen risk level, and constraints such as position caps and sector limits. It balances expected return with risk (e.g. via a risk-adjusted score) and enforces diversification so no single stock or sector dominates unless your risk level allows it.
How do I interpret optimizer output?
Check the suggested weights, volatility, expected return, and (if shown) Sharpe ratio or similar metric. Compare the portfolio's risk to your time horizon and comfort: if volatility or drawdown is higher than you want, lower the risk level and re-run. Use the comparison table on our portfolio risk calculator page to interpret risk scores.
Is the optimizer suitable for beginners?
Yes. Start with the Conservative, Balanced, or Aggressive presets instead of the raw 1–10 slider. Read the step-by-step instructions above and the portfolio risk guide to understand risk levels. The tool is educational and does not require an account.
How do I optimize my stock portfolio?
Add your stocks or ETFs, choose a risk level (Conservative, Balanced, or Aggressive), and run the optimizer. It will suggest weights that match your risk while keeping diversification and concentration in check. You can then adjust weights manually. Use the step-by-step instructions above; no signup or Excel required.
What is the optimal number of stocks in a portfolio?
There is no single "optimal" number—it depends on your risk level and diversification. Our optimizer typically suggests 8–15+ holdings for balanced risk, with more positions at lower risk levels and sometimes fewer, larger positions at higher risk levels. The key is diversification across sectors and correlation, not just the count. Try different risk levels in the tool to see how the number and size of positions change.
Next Steps After Optimization
Use our portfolio risk calculator to measure an existing portfolio, or compare risk profiles (conservative vs aggressive) to choose the right level.
This Portfolio Optimizer is designed to support informed decision-making and help you explore risk-aware portfolio construction. It does not constitute financial advice.