Research on the Development of Investment Portfolio Theory

Xiaoyu Li

doi:10.54097/h6kdjv16

Authors

Xiaoyu Li

DOI:

https://doi.org/10.54097/h6kdjv16

Keywords:

Portfolio Theory, Risk Management, Quantitative Investment Strategies, Capital Market Efficiency, Financial Stability.

Abstract

This paper provides a comprehensive analysis of portfolio theory evolution and its practical applications, tracing its development since Harry Markowitz introduced Modern Portfolio Theory (MPT) in 1952. The urgency to enhance capital market efficiency, optimize asset portfolios, and effectively measure and manage risks has intensified due to the rapid transmission of risk across global financial markets. This study reviews historical advancements and recent achievements in portfolio theory and practice. Furthermore, it constructs a theoretical research framework to guide the future development of quantitative investment strategies, focusing on active portfolio management. This framework also delineates several prospective research avenues. The advent of artificial intelligence and big data has transformed portfolio theory into a multidisciplinary nexus involving mathematical statistics, machine learning, and behavioral finance. This integration is crucial for refining asset portfolio optimization and understanding the dynamics of risk spillover and its determinants. The findings and theoretical advancements discussed herein are vitally important for fostering the sustainable development of capital markets and ensuring economic and financial stability. This study not only revisits foundational theories but also sets the stage for pioneering future research in financial analysis and portfolio management.

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