Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Series Vol. 56 , 01 December 2023
* Author to whom correspondence should be addressed.
Optimal investment portfolio is beneficial for investors to make decisions and construct investment strategy. This paper uses effective frontier methods to build an investment portfolio. This study selects 8 different companies from the USA, which are AMD, MRVL, LRCX, QCOM, INTC, AVGO, and TXN, and collects the data to optimize investment portfolio. The study finds that the optimal portfolio point is (0.1407, 0.0506), the risk is 0.1407, and the return is 0.0506. In this case, for AMD, MRVL, NVIDA, LRCX, INTC, QCOM, AVGO, and TXN, the weights for each company are 0.0502, -0.3867, 0.5289, 0.4367, -0.9987, -0.2805, 1, and 0.6501, respectively. The study allows for short selling and buy mechanisms, since a negative number is actually equivalent to a short sale. As a result, the study has an optimal portfolio that enables investors to make optimal investment decisions for the company the study choose. Through this research, it can help people to increase their life quality, because investment can help with more finance in the daily life, which can let people consume a better goods.
portfolio investment, efficient frontier, NVIDIA
1. De Bondt, W. F., & Thaler, R. (1985). Does the stock market overreact. The Journal of finance, 40(3), 793-805.
2. McGrattan, E. R., & Prescott, E. C. (2001). Is the stock market overvalued? (No. w8077). National Bureau of Economic Research. Retrieved from https://www.nber.org/papers/w8077
3. Guiso, L., Sapienza, P., & Zingales, L. (2008). Trusting the stock market. the Journal of Finance, 63(6), 2557-2600.
4. Mazur, M., Dang, M., & Vega, M. (2021). COVID-19 and the march 2020 stock market crash. Evidence from S&P1500. Finance research letters, 38, 101690.
5. Jung, J., & Shiller, R. J. (2005). Samuelson’s dictum and the stock market. Economic Inquiry, 43(2), 221-228.
6. Iqbal, J. (2012). Stock market in Pakistan: An overview. Journal of Emerging Market Finance, 11(1), 61-91.
7. Blanchard, O., Rhee, C., & Summers, L. (1993). The stock market, profit, and investment. The Quarterly Journal of Economics, 108(1), 115-136.
8. Bustos, O., & Pomares-Quimbaya, A. (2020). Stock market movement forecast: A systematic review. Expert Systems with Applications, 156, 113464.
9. Wattenberg, M. (1999, May). Visualizing the stock market. In CHI’99 extended abstracts on Human factors in computing systems (pp. 188-189).
10. Zuckerman, E. W. (2004). Structural incoherence and stock market activity. American Sociological Review, 69(3), 405-432.
11. Akhilesh G. (2023). Efficient Frontier: What It Is and How Investors Use It. Retrieved from June 28, 2023. Available at: https://www.investopedia.com/terms/e/efficientfrontier.asp
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).