Tobin's paper was a principal reason for his winning the Nobel Prize for economics in 1981. The popular public view, now sanctified by a Nobel, held that it was not Markowitz who invented modern portfolio theory, but Tobin. Risk in investments is the chance of loss. While most investors are risk-averse, they usually believe they will somehow escape the risks inherent in their investments. Investors seek to maximize return, believing the higher their return, the higher their risk.
Risk is an input in the business of generating returns.
It cannot be avoided. To do this, Markowitz did not average each of the separate risks in each of the portfolio's assets. Instead, he demonstrated that a portfolio's risk can be measured by the co-variance of its holdings. Co-variance is a statistical measure of the correlation between changes in the value of different assets in the same portfolio. Markowitz established that the riskiness of a portfolio depends on the co-variance of its holdings, not on the riskiness of the separate instruments.