TY - JOUR T1 - Practical Applications of Risk Parity, Maximum Diversification, and Minimum Variance: <em>An Analytic Perspective</em> JF - Practical Applications SP - 1 LP - 4 DO - 10.3905/pa.2014.1.4.039 VL - 1 IS - 4 AU - Roger Clarke AU - Harindra de Silva AU - Steven Thorley A2 - Goyal, Gauri Y1 - 2014/04/30 UR - https://pm-research.com/content/1/4/1.6.abstract N2 - Risk Parity, Maximum Diversification, and Minimum Variance: An Analytic Perspective Roger Clarke Harindra de Silva Steven Thorley This study provides portfolio managers with a number of insights into why particular weights of assets exist in the different risk-based portfolios. It also investigates the optimal relationships between low- and high-volatility stocks for each portfolio. Risk Parity, Maximum Diversification, and Minimum Variance: An Analytic Perspective , in the Spring 2013 issue of The Journal of Portfolio Management , presents the first analytic study of a long-only, large-set risk-parity portfolio. Co-authors Roger Clarke , Chairman of Analytic Investors , Harindra de Silva , President of Analytic Investors, and Steven Thorley , H. Taylor Peery Professor of Finance at Brigham Young University Marriott School of Management compare the findings with the previous research on long-only maximum-diversification and minimum-variance portfolios.In this Practical Applications report, co-authors Roger Clarke explains how their approach yield new insights for investors. Clarke points out that that although institutional investors and their advisors are considering alternative ways of approaching risk-based portfolios, their views may be constrained by empirical or historical limitations.Using an analytic approach rather than an empirical one, “we wanted to understand the core characteristics and tilts of three of the most popular risk-based portfolio construction approaches,” says Clarke. ER -