Review for the Different Portfolio Methods Such as Mean-variance Analysis and Fama Factor Model
Tianrun Wang · Advances in economics, business and management research/Advances in Economics, Business and Management Research · 2022
Portfolio Theory contains two important contents: the mean-variance analysis method and the portfolio effective boundary model.When people invest, they are essentially choosing between uncertain returns and risks.They maximize the expected return under a given level of expected risk or minimize the expected risk under a given level of expected return.Two important models will be used, Markowitz's portfolio theory and the Fama-french model.We would explain the difference in the returns of different stocks.And found that these models have certain shortcomings, it analyzes a practical example that gives an annotation for the proposed model and method.The proposed investment scheme will bring the corporation the greatest profits in terms of theory.