The Application of Markowitz Model Based Series of Companies’ Stock

DOI

10.2991/aebmr.k.220307.053How to use a DOI?

Keywords

Markowitz Model; Investment Portfolios; Capital Market Line

Abstract

When building successful investment portfolios, investors need to have efficient and accurate analysis models. This paper conducts a comprehensive analysis of ten companies’ stock prices to build permissible portfolios in three constraints to advise on different types of investors. This article first studies the stock market and select ten stocks according to their stock price, finance, and operational performance. Secondly, this paper introduces the method used to build permissible investment portfolios based on Markowitz Model and divide investors into three types according to their ability to have positions or arbitrary constraints. Then this article uses Excel solver to build our investment portfolio under three constraints and analyze the difference and similarities. Finally, through all the analysis, this paper conclude that Regulation T doesn’t have a significant influence on the investment portfolio. And arbitrary constraints will lead to a 26% decrease in return. Investors can choose the best portfolio according to their situation and their preference for risk and return. This paper provides a better forecasting method to use Markowitz Model to build investment portfolios and give advice to different investors.

Copyright

© 2022 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  - Ke Wei
PY  - 2022
DA  - 2022/03/26
TI  - The Application of Markowitz Model Based Series of Companies’ Stock
BT  - Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
PB  - Atlantis Press
SP  - 334
EP  - 340
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220307.053
DO  - 10.2991/aebmr.k.220307.053
ID  - Wei2022
ER  -