Does np.dot automatically transpose vectors?

Question

I am trying to calculate the first and second order moments for a portfolio of stocks (i.e. expected return and standard deviation).

expected_returns_annual         


        

Answer 1

I had the same question some time ago. It seems that when one of your matrices is one dimensional, then numpy will figure out automatically what you are trying to do.

The documentation for the dot function has a more specific explanation of the logic applied:

If both a and b are 1-D arrays, it is inner product of vectors (without complex conjugation).

If both a and b are 2-D arrays, it is matrix multiplication, but using matmul or a @ b is preferred.

If either a or b is 0-D (scalar), it is equivalent to multiply and using numpy.multiply(a, b) or a * b is preferred.

If a is an N-D array and b is a 1-D array, it is a sum product over the last axis of a and b.

If a is an N-D array and b is an M-D array (where M>=2), it is a sum product over the last axis of a and the second-to-last axis of b: