Construction Of Optimal Portfolio Using Sharpes Single Index Model: An Empirical Study on Nifty-50 Stocks
Year: 2025
Type: conference-paper
Abstract: Constructing an optimal portfolio to maximize returns at a given risk is increasinglychallenging for investors. This study focuses on building an ideal portfolio from NSE Niftystocks using the Sharpe Index Model. Combining exploratory and analytical approaches, theresearch delves into investment decision-making through literature review, expertconsultation, and secondary data analysis. Utilizing quantitative data from 25 NIFTY 50securities based on market capitalization and daily closing prices, the study aims to developa portfolio that minimizes risk and maximizes profit. Investment involves both potentialreturns and risks, with portfolio creation requiring an understanding of security analysis andportfolio management. Investors, whether fund managers or individuals, seek to balance riskand return, employing either traditional or modern approaches. While the traditional methodaligns with investor needs for income and capital growth, the contemporary approach, basedon Markowitz's Modern Portfolio Theory, uses analytical methods for risk-return analysis.Expanding on Markowitz's work, William Sharpe introduced the Single Index Model,simplifying portfolio analysis and reducing data complexity. This model remains widely usedby fund managers and offers valuable insights for Indian investors amidst an expanding stockmarket.
Author: Karanth, Bharathi
Institution: Poornaprajna Institute of Management
Language: English
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7110910084
FWCI:
Cites:
Cited by:
Related to: