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Risk and Bias in Portfolio Optimization
Department of Economics and Statistics, Linnaeus University, Växjö, Sweden.
Linköping University, Department of Mathematics, Applied Mathematics. Linköping University, Faculty of Science & Engineering. (Matematisk statistik)ORCID iD: 0000-0001-9896-4438
2020 (English)In: Recent Developments in Multivariate and Random Matrix Analysis: Festschrift in Honour of Dietrich von Rosen / [ed] Thomas Holgersson, Martin Singull, Cham: Springer Cham , 2020, p. 163-173Chapter in book (Refereed)
Abstract [en]

In this paper we derive weighted squared risk measures for a commonly used Stein-type estimator of the global minimum variance portfolio. The risk functions are conveniently split in terms of variance and squared bias over different weight matrices. It is argued that the common out-of-sample variance criteria should be used with care and that a simple unweighted risk function may be more appropriate.

Place, publisher, year, edition, pages
Cham: Springer Cham , 2020. p. 163-173
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Probability Theory and Statistics
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URN: urn:nbn:se:liu:diva-198560DOI: 10.1007/978-3-030-56773-6_10Scopus ID: 2-s2.0-85143860200Libris ID: l388lfr2jgqv93tvISBN: 9783030567729 (print)ISBN: 9783030567736 (electronic)OAI: oai:DiVA.org:liu-198560DiVA, id: diva2:1805512
Available from: 2023-10-17 Created: 2023-10-17 Last updated: 2023-11-21Bibliographically approved

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