Search results for "Portfolio Management"
showing 10 items of 42 documents
MARKET CORRELATION, MARKET RETURNS AND PORTFOLIO IMPLICATION
2012
In this paper we examine the market correlation and market returns from Romanian perspective. Market returns are higher in emerging markets than developed market returns, but form portfolio perspective it`s also important to evaluate how much correlations are changing in emerging markets. Our results are important in allocation of financial instruments in institutional portfolio management.
Continuous-time portfolio optimization under terminal wealth constraints
1995
Typically portfolio analysis is based on the expected utility or the mean-variance approach. Although the expected utility approach is the more general one, practitioners still appreciate the mean-variance approach. We give a common framework including both types of selection criteria as special cases by considering portfolio problems with terminal wealth constraints. Moreover, we propose a solution method for such constrained problems.
A Stochastic Soft Constraints Fuzzy Model for a Portfolio Selection Problem
2006
The financial market behavior is affected by several non-probabilistic factors such as vagueness and ambiguity. In this paper we develop a multistage stochastic soft constraints fuzzy program with recourse in order to capture both uncertainty and imprecision as well as to solve a portfolio management problem. The results we obtained confirm the studies carried out in literature addressed to integrate stochastic and possibilistic programming.
Designing portfolios of financial products via integrated simulation and optimization models
1999
We analyze the problem of debt issuance through the sale of innovative financial products. The problem is broken down to questions of designing the financial products, specifying the debt structure with the amount issued in each product, and determining an optimal level of financial leverage. We formulate a hierarchical optimization model to integrate these three issues and provide constructive answers. Input data for the models are obtained from Monte Carlo simulation procedures that generate scenarios of holding period returns of the designed products. The hierarchical optimization model is specialized for the problem of issuing a portfolio of callable bonds to fund mortgage assets. The …
Investing for the Long Run
2017
This paper studies long term investing by an investor that maximizes either expected utility from terminal wealth or from consumption. We introduce the concepts of a generalized stochastic discount factor (SDF) and of the minimum price to attain target payouts. The paper finds that the dynamics of the SDF needs to be captured and not the entire market dynamics, which simplifies significantly practical implementations of optimal portfolio strategies. We pay particular attention to the case where the SDF is equal to the inverse of the growth-optimal portfolio in the given market. Then, optimal wealth evolution is closely linked to the growth optimal portfolio. In particular, our concepts allo…
CO<SUB align="right">2 prices and portfolio management
2011
Since the launch of the European Union Emission Trading Scheme (EU ETS), the interest in the trade of EUAs is constantly increasing among academics and market participants. The objective of this paper is twofold: (a) a detailed description of this new market is provided for portfolio managers and (b) a comprehensive study of the implications of including Phase II EUAs in diversified portfolios is undertaken using as expected returns both historical and risk-adjusted returns. The results show that the opportunity set for investors increases when short positions in Phase II EUAs are taken.
Correlation, hierarchies, and networks in financial markets
2010
We discuss some methods to quantitatively investigate the properties of correlation matrices. Correlation matrices play an important role in portfolio optimization and in several other quantitative descriptions of asset price dynamics in financial markets. Specifically, we discuss how to define and obtain hierarchical trees, correlation based trees and networks from a correlation matrix. The hierarchical clustering and other procedures performed on the correlation matrix to detect statistically reliable aspects of the correlation matrix are seen as filtering procedures of the correlation matrix. We also discuss a method to associate a hierarchically nested factor model to a hierarchical tre…
When do improved covariance matrix estimators enhance portfolio optimization? An empirical comparative study of nine estimators
2011
The use of improved covariance matrix estimators as an alternative to the sample estimator is considered an important approach for enhancing portfolio optimization. Here we empirically compare the performance of 9 improved covariance estimation procedures by using daily returns of 90 highly capitalized US stocks for the period 1997-2007. We find that the usefulness of covariance matrix estimators strongly depends on the ratio between estimation period T and number of stocks N, on the presence or absence of short selling, and on the performance metric considered. When short selling is allowed, several estimation methods achieve a realized risk that is significantly smaller than the one obtai…
Strategising IT service management through ITIL implementation: model and empirical test
2015
Research on the Information Technology Infrastructure Library (ITIL) lacks appropriate theories and models that capture the distinct characteristics and implications of the ITIL implementation practice. The purpose of this study is to close this gap. Based on a literature review, we develop and empirically validate a theoretical model: the ITIL Implementation Project Model. The model includes significant antecedents, which provide a foundation upon which an effective ITIL implementation project can be built, as well as the pertinent effects of implementing ITIL. The results contribute to the current research stream on the strategising of IT service management as well as to an improved under…
IMPLEMENTING A VALUE ASSESSMENT TOOL FOR SERVICE INNOVATION IDEAS
2010
There has not been much discussion of how firms may assess the value of service innovation projects ex-ante in the extant research literature. This paper theoretically derives a value assessment tool for service innovation ideas called QSI (tool for pre-Qualification of Service Innovation projects). Thereafter QSI is implemented in three firms and it is explored to what degree the implementation improved managerial decision making on service innovation projects and investments. The findings indicated that the implementation of QSI had effects both in a portfolio management and a project management perspective. From a portfolio management point of view deployment of QSI improved the particip…