# plot.Markowitz: Plot method of class Markowitz In IntroCompFinR: Introduction to Computational Finance in R

## Description

Plot efficient frontier. The efficient frontier is a plot of portfolio expected return vs. portfolio standard deviation for a collection of mean-variance efficient portfolios - portfolios that minimize variance subject to a target expected return.

## Usage

 ```1 2``` ```## S3 method for class 'Markowitz' plot(x, plot.assets = FALSE, ...) ```

## Arguments

 `x` object of class Markowitz `plot.assets` if TRUE then plot asset sd and er with asset name labels `...` additional arguments passed to plot()

Eric Zivot

## Examples

 ``` 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29``` ```# construct the data asset.names = c("MSFT", "NORD", "SBUX") er = c(0.0427, 0.0015, 0.0285) names(er) = asset.names covmat = matrix(c(0.0100, 0.0018, 0.0011, 0.0018, 0.0109, 0.0026, 0.0011, 0.0026, 0.0199), nrow=3, ncol=3) r.free = 0.005 dimnames(covmat) = list(asset.names, asset.names) # tangency portfolio tan.port <- tangency.portfolio(er, covmat, r.free) # compute global minimum variance portfolio gmin.port = globalMin.portfolio(er, covmat) # compute portfolio frontier ef <- efficient.frontier(er, covmat, alpha.min=-2, alpha.max=1.5, nport=20) attributes(ef) plot(ef) plot(ef, plot.assets=TRUE, col="blue", pch=16) points(gmin.port\$sd, gmin.port\$er, col="green", pch=16, cex=2) points(tan.port\$sd, tan.port\$er, col="red", pch=16, cex=2) text(gmin.port\$sd, gmin.port\$er, labels="GLOBAL MIN", pos=2) text(tan.port\$sd, tan.port\$er, labels="TANGENCY", pos=2) sr.tan = (tan.port\$er - r.free)/tan.port\$sd abline(a=r.free, b=sr.tan, col="green", lwd=2) ```

IntroCompFinR documentation built on May 31, 2017, 2:01 a.m.