Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024)

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Optimizing Investment in the Automotive Industry: A Modern Portfolio Theory Approach with Tesla, GM, and Hyundai

Authors
Ruotai Zhang1, *
1The University of Edinburgh, Edinburgh, EH8 9YL, United Kingdom
*Corresponding author. Email: S2226170@ed.ac.uk
Corresponding Author
Ruotai Zhang
Available Online 24 February 2025.
DOI
10.2991/978-94-6463-652-9_31How to use a DOI?
Keywords
Modern Portfolio Theory; Portfolio Optimization; Diversification; Sharpe Ratio
Abstract

The automotive manufacturing sector is undergoing a significant transformation, which is mainly driven by innovations in sustainable technology and the increasing demands in electric vehicles (EVs). This transition to environmentally friendly technologies in the industry creates substantial opportunities and challenges for potential investors. The Modern Portfolio Theory (MPT) offers a feasible solution for optimizing investment portfolios by balancing risk and return. This research explores the application of MPT to form an optimal portfolio within the automotive sector, specifically focusing on U.S. stocks from Tesla, General Motors (GM), and Hyundai. Simulations were carried out using six months of data in 2024 from the Nasdaq, and the results showed that a portfolio comprised of Tesla and GM stocks, with zero allocation to Hyundai, offers the optimal balance. The findings highlight the role of correlation analysis and diversification in portfolio management. Overall, this research aims to emphasize the relevance of MPT method in guiding investment decisions in dynamic and innovative markets, as well as providing valuable insights for investors seeking to navigate the evolving landscape of the automotive industry.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024)
Series
Advances in Economics, Business and Management Research
Publication Date
24 February 2025
ISBN
978-94-6463-652-9
ISSN
2352-5428
DOI
10.2991/978-94-6463-652-9_31How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Ruotai Zhang
PY  - 2025
DA  - 2025/02/24
TI  - Optimizing Investment in the Automotive Industry: A Modern Portfolio Theory Approach with Tesla, GM, and Hyundai
BT  - Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024)
PB  - Atlantis Press
SP  - 303
EP  - 316
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-652-9_31
DO  - 10.2991/978-94-6463-652-9_31
ID  - Zhang2025
ER  -