EMFPS: How Can we Get the Power Set of a Set by Using of Excel? (The Case Analysis of Big Data)

Method / Finance and Investing


EMFPS: How Can we Get the Power Set of a Set by Using of Excel? (The Case Analysis of Big Data)
gholamreza soleimani , Management Consultant, Iran

Risk, Rate of return, Portfolio of Assets, power set.


Following to my previous article posted on link: emfps. Blogspot.com/2012/08/emfps-how-can-we-get-power-set-of-set.html, let me tell you one of the applications of this method in Risk Management. In this article, I am willing to solve a case in which the template is referred to my article of “EMFPS: Efficient Portfolio of Assets (The Optimization for Risk, Return and Probability)” posted on link: emfps. Blogspot.com/2011/10/emfps-efficient-portfolio-of-assets.html.
The Case: To Find Minimum Risk for Portfolio of Assets in Variety of the Outcomes
If we have had a range of probability for our outcomes where there is not the same probability assigned to the outcomes, how can we calculate minimum risk for the portfolio of assets? What are the probability distributions assigned to the expected portfolio return in which we will have minimum risk?
Let me start the solution of this case by using of the example stated in article of “EMFPS: Efficient Portfolio of Assets (The Optimization for Risk, Return and Probability)” posted on link: emfps. Blogspot.com/2011/10/emfps-efficient-portfolio-of-assets.html as follows:
Referring to step (3), I define the range of probability for six outcomes equal to 10% to 21%.
10% ≤ Pr ≤ 21%
The solution is step by step below cited:
 On the spreadsheet of excel, we should type:
A1 = p
A2 = 6
A3 = 0.1, A4, = 0.11, A5 = 0.12, A6 = 0.13, A7 = 0.14, A8 = 0.15, A9 = 0.16, A10 = 0.17
A11 = 0.18, A12 = 0.19, A13 = 0.2, A14 = 0.21
 Using from VB code written by Myrna Larson mentioned in article of “EMFPS: How Can We Get the Power Set of a Set by Using of Excel?” posted on link: emfps. Blogspot.com/2012/08/emfps-how-can-we-get-power-set-of-set.html
 We will have 665280 cells filled with different permutations (please check it by formula = PERMUT (12,6) on excel)
 Due to each subsets is into one cell, to split the elements of subsets into other cells, we should utilize Data Tab – Data Tools – Text to Columns

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