Application of Markowitz Efficiency Frontier on Indian IT Sector with Accentuation on Infosys

International Journal of Economics and Management Studies
© 2022 by SSRG - IJEMS Journal
Volume 9 Issue 5
Year of Publication : 2022
Authors : Sunanda Deshpande, Kapil Deshpande
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How to Cite?

Sunanda Deshpande, Kapil Deshpande, "Application of Markowitz Efficiency Frontier on Indian IT Sector with Accentuation on Infosys," SSRG International Journal of Economics and Management Studies, vol. 9,  no. 5, pp. 43-52, 2022. Crossref, https://doi.org/10.14445/23939125/IJEMS-V9I5P106

Abstract:

Indian IT sector has grown tremendously, and thus it contributes a fair share to Indian GDP growth. the employment opportunities in the sector help the country reduce the unemployment rate. Thus IT sector has become an alluring vertical for the investor to dive into and make considerable gains. Fundamental analysis can help us narrow down on a few selected stocks. Still, how much weight should be allocated to each stock in the portfolio to bag maximum gains arises. This paper makes a humble attempt to narrow down on a firm, i.e., Infosys, and involves the creation of Markowitz efficiency frontier using an algorithm in Python. the algorithm is articulated to be used for any number of stocks in a portfolio for any given timeframe. the paper tries to highlight how an efficiency frontier can be created for any given portfolio and how its analysis can provide surmountable insights to an investor.

Keywords:

Covariance, Standard Deviation, Markowitz Efficiency Frontier, Beta, IT sector, Rate of return, Expected Return, Volatility, Portfolio Returns, Portfolio Risk.

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