> For the complete documentation index, see [llms.txt](https://docs.frnx.ai/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.frnx.ai/explainer-modern-portfolio-theory-mpt/application-in-franklin-ai.md).

# Application in Franklin AI

Franklin AI employs MPT to:

* **Generate Optimized Portfolios:**
  * It calculates expected returns, risks, and correlations using historical and real-time data.
  * Constructs portfolios along the efficient frontier to balance risk and return.
* **Diversify Assets:**
  * Reduces risk by analyzing correlations among meme coins, blue chips, and other assets.
* **Improve User Decision-Making:**
  * Provides visualizations like efficient frontier plots, helping users understand risk-return trade-offs.