> For the complete documentation index, see [llms.txt](https://wpahelp.windhamlabs.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://wpahelp.windhamlabs.com/expected-returns/implied-returns.md).

# Implied Returns

Given a set of portfolio weights and a covariance matrix there is a set of expected returns, we term “implied returns,” which deem the portfolio weights optimal.

This can help investors understand the implicit assumptions of maintaining their current portfolio weights. 

An investor may choose to re-balance their portfolio if the implied returns are substantially different from the asset returns that could be realistically expected in the forthcoming period.