Portfolio analysis is based on the Nobel Prize-winning work of Harry Markowitz in the early 1950s in which he showed that the variance in results from a portfolio of stocks could be reduced by choosing stocks with a negative correlation. If two stocks are correlated negatively, when one stock is down the other stock will be up, and the portfolio will grow with very few wild swings. This concept has been introduced into the petroleum literature by several authors with some modifications. The following paragraphs from Brashear, Becker, and Faulder give an overview of the methodology. Harry Markowitz (1957) demonstrated in the stock market that risk and return are usually correlated.