Mean/variance/covariance risk modeling method (MVC)

{
  "id": "MLC-T-INS-002154",
  "term": "Mean/variance/covariance risk modeling method (MVC)",
  "field": "Insurance and risk management",
  "definition": "A quantitative approach in risk management that assesses investment portfolios based on the expected return (mean), the dispersion of returns (variance), and the co-movement between different assets (covariance). This method quantifies the trade-off between risk and return, allowing for the construction of diversified portfolios. It forms the foundation of modern portfolio theory, where risk is measured by the standard deviation of returns.",
  "abbreviation": "MVC",
  "url": "https://mlchart.com/terminology/insurance/mean-variance-covariance-risk-modeling-method-mvc/"
}