Proceedings of the 2024 2nd International Conference on Management Innovation and Economy Development (MIED 2024)

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The Application of Portfolio Theory in Practice

Authors
Fangni Jiang1, *
1Department of International Business School, Chongqing Technology and Business University, Chongqing, China
*Corresponding author. Email: Anastasia1@ctbu.edu.cn
Corresponding Author
Fangni Jiang
Available Online 15 October 2024.
DOI
10.2991/978-94-6463-542-3_60How to use a DOI?
Keywords
Investment Decision Daking; Portfolio Theory; Risk Management; Equity Investment
Abstract

With the increasing growth of the capital market, investment is particularly important in the application of the market. On this premise, this paper aims to explore the application of portfolio theory in practical investment activities, and take BYD Co., Ltd. and Bank of China as examples for in-depth analysis. Firstly, the paper reviews the basic framework and core principles of portfolio theory, including the risk diversification effect of portfolio, the trade-off between expected return of assets and risk, and the construction of effective frontier. Subsequently, the article takes BYD and Bank of China as examples to elaborate on how to use portfolio theory to make investment decisions. As the leader of new energy vehicles in China, BYD has high growth potential and large market volatility, while Bank of China, as a large state-owned commercial bank, has stable returns and low risks. By incorporating the two into the same portfolio, the balance of risk and return can be achieved. The article further evaluates the performance of BYD and Bank of China in their portfolios through quantitative analysis. Finally, the paper summarizes the effectiveness and challenges of portfolio theory in practical application, and puts forward targeted suggestions in order to provide investors with more scientific and effective investment reference.

Copyright
© 2024 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 2024 2nd International Conference on Management Innovation and Economy Development (MIED 2024)
Series
Advances in Economics, Business and Management Research
Publication Date
15 October 2024
ISBN
978-94-6463-542-3
ISSN
2352-5428
DOI
10.2991/978-94-6463-542-3_60How to use a DOI?
Copyright
© 2024 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  - Fangni Jiang
PY  - 2024
DA  - 2024/10/15
TI  - The Application of Portfolio Theory in Practice
BT  - Proceedings of the 2024 2nd International Conference on Management Innovation and Economy Development (MIED 2024)
PB  - Atlantis Press
SP  - 516
EP  - 526
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-542-3_60
DO  - 10.2991/978-94-6463-542-3_60
ID  - Jiang2024
ER  -