Portfolio Management : at the core of the Trading Training Course

What is Portfolio Management ?

The current financial model is based on returns of asset portfolios, managed by Traders, though Portfolio Management can occur in numerous ways, as explained in one of our recent publications.

This is the core of finance, which will be a guiding focus from the first days in the CIT Trading Room, so that students can quickly become familiar with these basics. In effect, all concepts that follow will be founded on this discipline: technical trading analysis, choice of a systematic or discretionary trading system… It is not a question of simply calculating the received returns, but rather to predict, analyze and measure. Several methods exist, which evaluate desired gains on a portfolio according to its volatility and risk. Tools are available to investors, and they must be mastered while working in a Trading Room, as they are at the base of management skills.

A more theoretical approach is based on the study of rules determined by states and international institutions that surround this form of management. These laws, which are becoming stricter are stricter, absolutely must be taken into account by CIT students, in order to follow a responsible and consistent code of financial conduct.

Objectives of the study of Portfolio Management

•  Understand modern financial models
• Acquire risk evaluation methods : The Sharpe, Treynor and Jenson ratio
• Know how to use tools of risk management :
  • Volatility and standard deviation
  • Covariance and Variance
  • Correlation
  • Beta
  • Value at Risk
• Differentiate and evaluate interest in different management styles :
  • Active and passive management
  • Traditional and alternative management
• Predict Gains and losses with the Kelly formula, a tool of money management