The Efficiency between Markowitz Model and Single Index Model

It is important to investigate the different impact factors on establishment of investment portfolio. In order maximize profit a portfolio, this research selects six stocks: Adobe (ADBE), International Business Machines Corp (IBM), Bank America Corporation (BAC), Citigroup (C), Southwest Airlines Co (LUV) and Alaska Air Group Inc. (ALK) as an empirical case conduct decision. This compares results two models (Markowitz model Index Model) by analyzing data portfolio such minimum risk maximum Sharpe Ratio finds that Markowitz Model more appropriate establishment, which presented its sharper efficient frontier. Under all conditions study considered, always gets returns than when increases same amount. Therefore, concludes suitable for By in models, has found better thus make rational investments.