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Constant Proportion Portfolio Insurance
(redirected from CPPI Constant Proportion Portfolio Insurance)

   Also found in: Wikipedia 0.01 sec.
Constant Proportion Portfolio Insurance
A trading strategy that sets a floor on a portfolio value by investing in a risky and a riskless asset such that if the risky asset falls to its lowest expected value, the portfolio value will be at the floor. The weights are altered as the asset values change. This limits the downside risk while maintaining a potential upside through the exposure to the risky asset. This is analogous to buying a put option on the portfolio. Also see Portfolio Insurance.


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