Portfolio Selection: Using Markowitz Model on selected Sectors Companies in India

As we know that portfolio management means diversification of scrip at last minimize portfolio risk. First part of paper presented research methodology and second part presented the how the portfolio diversification help investors for switching portfolio on basis proportion with reference to change risk and return trade off. For diversification of portfolio researcher followed Markowitz model selected three major sectors liked FMCG, Banking, IT, Infrastructure and Auto mobile for analysis of proportion of investment with number of different combination. Researcher found that co efficient of correlation between for the entire sector will high variance due to the high market fluctuation with industry performance. It must be positive return with minimize total portfolio risk. Markowitz model also focus on how to set efficient frontier with diversification of portfolio and reached line have positive correlation between scrip’s, those scrip categories from difference sectors.