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Portfolio Theory in Investment Decision Making: A Case Study of Xiaomi, Apple, and Samsung

In: Proceedings of the 2025 3rd International Academic Conference on Management Innovation and Economic Development (MIED 2025)

Author

Listed:
  • Sai Na

    (Singapore Institute of Management)

Abstract

The study analyses the historical stock data of Xiaomi, Apple, and Samsung and examines their investment risk and return characteristics. It discusses the possibility of building an optimised asset portfolio. By examining key financial indicators, including each company’s standard deviation, average return, expected portfolio return, Sharpe ratio and correlation coefficient were used to obtain the corresponding results. The author finds that Xiaomi has the highest average return. However, the positive correlation between Apple and Samsung is higher. This suggests that Apple and Samsung tend to move more in the same direction in the stock market. It combines these stocks into a portfolio that limits the benefits of diversification. Therefore, it is concluded that constructing portfolios to achieve effective risk diversification by considering correlations between assets is crucial. The analysis is beneficial to help investors build a suitable investment strategy. Investors can optimize the risk-adjusted return of the portfolio by choosing assets with low correlation.

Suggested Citation

  • Sai Na, 2025. "Portfolio Theory in Investment Decision Making: A Case Study of Xiaomi, Apple, and Samsung," Advances in Economics, Business and Management Research, in: Barbara Siuta-Tokarska & Adriana Grigorescu & Md. Mamun Habib & Yifeng Zhu (ed.), Proceedings of the 2025 3rd International Academic Conference on Management Innovation and Economic Development (MIED 2025), pages 482-487, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-835-6_51
    DOI: 10.2991/978-94-6463-835-6_51
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