Abstract
This article investigates the criteria that individual investors should consider within the Sharpe Ratio perspective. Based on risk, return, and correlation, this research used Excel program to find the optimal portfolio and efficient frontier which offer the highest expected return for a defined level of risk or the lowest risk for a given level of expected return. Among the historical real data of 16 assets, this study found that the optimal portfolio contains assets that has lowest correlation and highest individual risk/return ratio. With this finding, investors can pick combination of domestic and international stocks from different sectors that has low correlation while maintain highest individual risk/return ratio. Therefore, the individual investors can tailor their own risk tolerance to build personalized portfolio with highest Sharpe Ratio.
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