Stock Selection by Using Fundamental Analysis and Optimal Portfolio Construction: A Case Study of Equity Market of India
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Abstract
In this study, we focus on determining the optimal portfolio for investing in Indian equity firms within a specific economic sector, considering both individual and portfolio manager approaches. A portfolio, comprising diverse assets such as stocks, bonds, and money market goods, is strategically managed with the goal of maximizing returns while minimizing risks, in accordance with investor preferences. Emphasizing risk-adjusted return as a key metric for portfolio selection, our research assesses the balance between potential gains and associated dangers. The study utilizes portfolio management methodologies, evaluating the financial data of CNX Nifty-listed companies and employing a stock selection process based on five-year statistics from 2018 to 2023. Our findings contribute to the understanding of effective portfolio construction, selection, and evaluation, catering to the dynamic preferences and goals of investors in the Indian equity market.