The Differences Between Constructing a Portfolio and Single Stock and How to Compare Their Performance

DOI

10.2991/assehr.k.211209.094How to use a DOI?

Keywords

Portfolio; Efficient Frontier; Sharpe ratio

Abstract

This article aims at the China stock market. It will focus on the difference between the single stock and stock portfolio. This paper expounds and discusses the relevant problems of calculating portfolio income from the aspects of theory and practice. The research will choose two assets from both the Pro-cyclical and Counter-cyclical industries and use their return of stock to calculate the mean and standard deviation. It will also use efficient frontier to construct the Global Minimum variance portfolio. What’s more, it also uses the Sharp ratio to further compare the differences between individual assets and portfolios. Through this research, the investor should know the importance of building a correct portfolio. The research shows that when the investor uses particular performance measures to compare the single stock and stock portfolio, the portfolio has greater performance than a single stock.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Hanpeng Dai
PY  - 2021
DA  - 2021/12/15
TI  - The Differences Between Constructing a Portfolio and Single Stock and How to Compare Their Performance
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 566
EP  - 571
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.094
DO  - 10.2991/assehr.k.211209.094
ID  - Dai2021
ER  -