Portfolio Analysis of Five Stocks Under Different Constraints Based on Markowitz Model & Index Model

Abstract

Since the dawn of the 21st century, while there has been an abundance of talented fund managers, truly exceptional asset portfolios have been rare. Addressing this phenomenon, the study delves into the current state of asset management, employing two renowned financial models: the Markowitz model and the Index model. These models are utilized to analyze the returns and risks of five high-performing assets. Additionally, acknowledging the diversity of investor preferences, this paper incorporates five different constraints to cater to a wider spectrum of client needs. The crux of the research is the optimization of the asset portfolio, grounded in these models and constraints. The paper findings indicate that the integration of the Markowitz and Index models with the capital market line and the efficient frontier proves highly effective in the management of risk asset portfolios. In this paper, the Markowitz model consistently excels over the index model in both minvariance and maxsharpe scenarios. This study has important reference value for investors in related fields.