On this page
Use an exact symmetric model
Two assets have equal 20% dispersion, weights 50/50 and correlation −1. Their weighted return deviations cancel in this idealized pair. Variance and standard deviation are zero.
Keep zero and undefined distinct
The variance calculation remains defined. Marginal volatility contribution divides by portfolio standard deviation, and a risk share divides by it again. Those ratios are not defined at zero, so the tool omits them.
| Output | Status |
|---|---|
| Variance | 0, defined |
| Standard deviation | 0, defined |
| Volatility contributions/shares | Undefined at the zero denominator |
Do not erase a zero-volatility asset’s role
An asset with zero supplied dispersion can still carry capital weight or a stated return. It contributes no covariance product in this second-moment model. Empirical correlation with a constant series would itself be undefined.
Keep the ideal model separate from reality
Exact offset is a stipulated mathematical case, not proof of risk-free execution or stable future dependence. The result does not include transaction, liquidity or estimation uncertainty.