ABSTRACT

Objectives: Applying Sharpe's single index model, the current study seeks to create an optimum capital structure. This is the simplest and most generally utilised model for putting together an ideal portfolio.

Design Methodology: The Nifty 50 index data was gathered from the NSE website during a five-year timeframe. The study employs a descriptive research design. The study relies on secondary data. Secondary data is gathered from sources such as the National Stock Exchange (NSE), the Reserve Bank of India (RBI), Money Control, and Yahoo Finance.

Findings: Precisely eight equities were identified to be representative of the efficient portfolio out of 50 assessed for the analysis. The portfolio construction yield was 36.54 percent, greater than the normal Nifty return, and the portfolio beta is well connected with the stock market.

Research Implications: This research will help traders build the best portfolio possible using any selection of equities they choose.

Scope for future work / Research limitations: Several other generic and macroeconomic factors influence the behavior of a stock, therefore investors should take these into account when choosing stocks for their ideal portfolio. Other indices and different combinations of equities can be used to do further research.

Originality/value: Through using Sharpe's Single Index Model, this study seeks to design an efficient portfolio by evaluating 50 stocks that make up the Nifty 50 index.

Keywords: Portfolio Risk-Return, Beta value, Optimal Portfolio

Paper Type: Research Paper

REFERENCES

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• Naveen, C. (2014). Application of Sharpe Single Index Model to BSE”.Management Today. Reteried from:  https://www.semanticscholar.org/paper/Application-of-Sharpe-Single-Index-Model-to-BSE-Naveen/2676aa1bd76dd81e1c171a90db519a05744a2acf
• Patel, A. K., &Subhodeep. (2017). Construction of Optimal Portfolio using Sharpe's Single Index Model and Markowitz Model: An Empirical Study on Nifty 50 Stocks.DOI: https://dx.doi.org/10.2139/ssrn.3259328
• Sharpe, W. F. (1964). A Simplified Model for Portfolio Analysis.Management Science, Vol. 9, No. 2, .DOI: https://doi.org/10.1287/mnsc.9.2.277