Construction of Optimal Portfolio using Sharpe Index Model
Presented paper in "International Conference on Challenges and opportunities in Mechanical Engineering, Industrial Engineering and Management Studies (ICCOMIM - 2012):
9 Pages Posted: 6 Oct 2019
Date Written: April 1, 2012
The investor always likes to have less risk and higher returns. To reduce the risk investors will do diversification. Diversification means combination of securities which provides the highest return and has lowest risk. Combination of securities is called portfolio. Risk and Return are two basic factors for construction of a portfolio. The principle point of every investor in construction of a portfolio is to maximize the return and to minimize the risk. The portfolio which has highest return and lowest risk is termed as Optimal Portfolio. Sharpe Index Model is adequate and conceptually sound in construction of optimal portfolio. This paper makes an attempt to construct optimal portfolio using Sharpe Optimization Model from NSE NIFTY Stocks.
Keywords: Sharpe, Portfolio, Risk, Return and NSE Nifty
JEL Classification: G11
Suggested Citation: Suggested Citation