Empirical analysis of optimized portfolio allocation based onMarkowitz and index models

Abstract

There is a need to achieve a balance between asset returns and risks. This has remained a central focus of financial market research. It has served as a crucial reference for investment decision-making. There has been a weakness as this financial investment theory relies on qualitative analysis. This method has lacked robust quantitative methods. The resurgence and expansion of Western economies have led to a flourishing financial investment activities. This has prompted the emergence of the Modern Portfolio Theory (MPT). The theory was pioneered by Harry Markowitz in 1952. MPT has rapidly evolved over the period. It has attracted numerous scholars and yielded substantial research outcomes (Markowitz, 1991).