Portfolio Selection Using Mean Variance Theory Based on the 30-year Historical Returns of Selected Subsectors of the Philippine Industrial Sector

A. D. Yamanaka*, M. N. Young, T. N. Chuahay, Y. Pratseyo, S. Persada, R. Nadlifatin

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

Portfolio selection is an important part of investment management that aims to select the right combination of assets to achieve an optimal risk-return ratio. This study integrates the Mean-Variance Theory utilizing the 30-year historical returns of the Philippine Stock Exchange. Three subsectors of the Industrial Sector were used as the investment pool. The back-test results showed that the Mean-Variance portfolios of selected subsectors can outperform the industrial sector and not the market. Stakeholders must be cautious when investing in these three subsectors, considering the values obtained from the simulations. There are recommended portfolio selections wherein companies have a specific allocation that investors and financial managers can use whenever they decide to invest in these subsectors. Overall, this study offers a framework for investors to use as a guide in diversifying their stakes in the Philippine Stock Exchange.

Original languageEnglish
Title of host publicationIEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2024
PublisherIEEE Computer Society
Pages470-474
Number of pages5
ISBN (Electronic)9798350386097
DOIs
Publication statusPublished - 2024
Event2024 IEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2024 - Bangkok, Thailand
Duration: 15 Dec 202418 Dec 2024

Publication series

NameIEEE International Conference on Industrial Engineering and Engineering Management
ISSN (Print)2157-3611
ISSN (Electronic)2157-362X

Conference

Conference2024 IEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2024
Country/TerritoryThailand
CityBangkok
Period15/12/2418/12/24

Keywords

  • Back-test
  • Industrial Sector
  • Mean-Variance Theory
  • Philippine Stock Exchange
  • Portfolio Selection

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