Portfolio optimization is a quantitative approach used in finance and investment to determine the best allocation of assets. This involves analyzing historical data, understanding the correlation between different assets, and determining the risk-reward profile of different investment combinations. The optimization process aims to achieve the highest expected return for a given level of risk or alternatively to minimize risk for a specific expected return. Modern portfolio theory is a common framework used in portfolio optimization, founded by Harry Markowitz, which introduces concepts of efficient frontier and diversification.