Research on Portfolio Management in Financial Markets Against the Background of the Epidemic

Abstract

Portfolio management serves as an important role in risk management, therefore, the paper intends to study its role in risk hedging and the influence of the COVID-19 pandemic on certain examples, whose data are from Yahoo Finance. The main methodology is to apply mathematical models on collected data and study the effectiveness of portfolio management including portfolio optimization and time series analysis. It can be concluded from the results that different stocks have different similarities according to the clustering results. A fixed portfolio is best suited for real capital assets in pursuit of lower risk level and higher profits under a relatively stable circumstance. And the pandemic has direct impacts on the stock price including higher variance and higher level of volatility. The meaning for this research is give illustrations and models that can be further applied in real financial markets added with the consideration of significant events such as pandemic.