The Feasibility of Identifying the Portfolio Frontier in the Stock Market Using the Markowitz Model: A Demonstration with One Year of Daily Data
Year: 2025
Type: article
Abstract: With the rapid development of the global economy, an increasing number of people are investing in the stock market to pursue higher returns. As a result, identifying the portfolio frontier has become an increasingly popular topic of discussion. This paper explores the feasibility of determining the portfolio frontier using the Markowitz model. After reviewing recent literature on the subject, I derive the relevant formulas. To validate the practical application of the theory, I collect daily closing prices of 15 different stocks from April 30, 2020, to April 30, 2021, and apply the data to the model. The results demonstrate that utilizing the Markowitz model to determine an optimal investment strategy can yield significantly higher returns with only a marginal increase in risk.
Author: Jiani Chen
Language: English
Field: Decision Sciences
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4410619836