Portfolio Variance is a measure of the risk or volatility of a portfolio of investments. It is calculated by comparing the returns of the individual securities in the portfolio to the overall return of the portfolio.Portfolio variance is typically expressed as a percentage and is calculated using statistical formulas. It is a measure of how much the returns of the individual securities in the portfolio fluctuate around the average return of the portfolio.A portfolio with a high variance has a higher level of risk, as the individual securities in the portfolio may experience larger fluctuations in their returns. A portfolio with a low variance has a lower level of risk, as the individual securities in the portfolio tend to experience smaller fluctuations in their returns.It is important for investors to consider the variance of their portfolio when making investment decisions, as it can impact the level of risk they are willing to take on. A well-diversified portfolio may have a lower variance, as it spreads risk across a variety of different asset classes and securities. However, it is important to understand that all investments carry some level of risk and the value of a portfolio may fluctuate over time.
