There are not enough tools for retail clients to assess their systematic risk in their discretionary investment accounts. Can we build an interactive web-based tool that will do the following?
1. Scenario testing
2. Provide a risk adjusted return ouput scoring their overall systematic risk
3. Calculate a user's unique risk profile upon completion of a internal survey
4. Provide the client the allocation of their portfolio based on his or her risk profile
1. Use yahoo datareader to bring in price data
2. Use Capital Asset Pricing Model (CAPM) to calculate the expected market returns
3. Use Efficient Frontier theory to locate several optimal portfolio's that provide the greatest return for a given level of risk (standard deviation)
4. Risk Free rate assumption will be equal to overnight treasury repo's
5. Have user input options based on their own risk profile. [1] most aggressive to [10] risk averse