Estimate two-asset inverse-volatility weights that equalize volatility contributions.
It makes the prices, cash flows, rates, time periods, weights, and model conventions explicit so you can inspect an entered scenario without hidden live-market assumptions.
Calculation structure
Follow the stated model and units
w1 = σ2/(σ1+σ2); w2 = σ1/(σ1+σ2).
Visual explanation
See how the inputs become the result
Assets and weightsReturn contribution
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Volatility and dependenceRisk estimate
w1 = σ2/(σ1+σ2); w2 = σ1/(σ1+σ2).
Read the estimate correctly
Use the result within its boundaries
Volatilities 10% and 20% produce weights 66.667% and 33.333%.
Both entered volatilities must be positive. For two assets, inverse-volatility weights equalize component volatility contributions under the shared-correlation model. This is not a general covariance optimizer.
Quick guide
How to use this calculator
Enter the cash flows, values, rates, timing, or portfolio assumptions named in the fields.
Use one consistent period and currency convention throughout the scenario.
Read the calculator-specific model limits before interpreting the result.
Calculation method
Calculation method
w1 = σ2/(σ1+σ2); w2 = σ1/(σ1+σ2).
Model, simulation, root, square-root, and compounding outputs are estimates and are visibly marked approximate.
Worked example
Worked example
Volatilities 10% and 20% produce weights 66.667% and 33.333%.
w1 = σ2/(σ1+σ2); w2 = σ1/(σ1+σ2).
Supported inputs
Precision and limits
Visible input limits
Inputs support up to 12 decimal places and lists support at most 1,200 rows. Iteration and simulation bounds are displayed in their fields.
International scope
No exchange, tax system, reporting standard, currency, fund rule, trading calendar, or market convention is selected automatically.
Decision boundary
Outputs are entered scenarios, not valuations, forecasts, risk limits, executable trades, suitability decisions, or recommendations.
Calculator-specific assumptions
Both entered volatilities must be positive. For two assets, inverse-volatility weights equalize component volatility contributions under the shared-correlation model. This is not a general covariance optimizer.
