This study aims to examine the optimization of investment portfolio returns through the application of an integrated risk management approach. In today's volatile financial markets, managing risk is crucial for investors seeking to maximize returns while minimizing potential losses. This qualitative research employs a literature review methodology to explore existing theories, models, and strategies related to risk management in investment portfolios. The study focuses on the integration of various risk factors, such as market, credit, and liquidity risks, and how they can be effectively managed to optimize portfolio performance. By analyzing key academic literature and industry practices, this study highlights the importance of diversification, asset allocation, and the use of modern financial instruments, such as derivatives, in mitigating risk. Furthermore, the study discusses the role of advanced risk assessment tools, such as Value at Risk (VaR) and stress testing, in enhancing decision-making processes. The findings suggest that an integrated risk management approach not only helps in reducing exposure to potential financial downturns but also contributes to more stable and higher long-term portfolio returns. The paper concludes with recommendations for investors and financial managers to adopt a holistic risk management strategy to optimize investment outcomes, particularly in uncertain market conditions.
Halim Tjiwidjaja (Tue,) studied this question.