Maximize Returns and Minimize Risk: Optimal Portfolio Construction Unveiled
The goal of the research was to create the best mix of stocks to maximize returns and minimize risks for investors in the Indian market. The researchers used Sharpe's Single Index Model and Markowitz Model to build an optimal portfolio of 50 Nifty50 stocks. By analyzing the excess return-to-beta ratio of each stock, they determined the best stocks to include in the portfolio. The study found that by diversifying investments across multiple securities, investors can achieve higher returns while managing risks effectively.