Efficient Frontier vs Tangency Portfolio

Quick comparison to help you distinguish these two crypto terms.

Efficient Frontier
advanced
strategy

Curve mapping all portfolio combinations offering maximum return for each risk level, representing optimal portfolios where return cannot increase without increasing risk or vice versa.

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Tangency Portfolio
advanced
strategy

Portfolio on the Efficient Frontier that offers the highest Sharpe Ratio, representing the optimal risky asset combination when paired with risk-free borrowing or lending.

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