Using a Nobel-winning stock market theory to save the reefs
Portfolio selection rules on evaluating risk used to pick 50 reefs as ‘arks’ best able to survive climate crisis and revive coral elsewhere.
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Portfolio selection rules on evaluating risk used to pick 50 reefs as ‘arks’ best able to survive climate crisis and revive coral elsewhere.
Nobel prize-winning economic theory used by investors is showing early signs of helping save threatened coral reefs, scientists say. Researchers at Australia’s University of Queensland used modern portfolio theory (MPT), a mathematical framework developed by the economist Harry Markowitz in the 1950s to help risk-averse investors maximize returns, to identify the 50 reefs or coral sanctuaries around the world that are most likely to survive the climate crisis and be able to repopulate other reefs, if other threats are absent. The study recommends targeting investment in conservation projects...
Australian scientists employ modern portfolio theory to target conservation priorities and generate a list of fifty priority coral reefs .
Portfolio selection rules on evaluating risk used to pick 50 reefs as ‘arks’ best able to survive climate crisis and revive coral elsewhere
In some cases, over-diversifying could hurt your portfolio performance.