Portfolio Analysis for the Retired Population

Abstract

Based on the realistic needs of retirees, this paper examines the optimal investment portfolio through diversification. Allows retirees to maximize their returns while taking less risk. Stocks include technology, real estate, biopharmaceuticals, education and other industries. In this study, monthly closing prices from October 2017 to October 2020 were selected as data, and the mean-variance model, CAPM model, and FF3F model were used to calculate the maximum Sharpe ratio and the percentage of each stock, respectively. In the mean-variance model, the maximum Sharpe ratio is about 0.35, of which Vanke accounts for 0 and AAPL accounts for the largest share, about 0.5; in the CAPM model, the maximum Sharpe ratio is about 0.11, of which Heng Rui-like accounts for 0 and CSL accounts for the largest share, about 0.353; in the FF3F model, the maximum Sharpe ratio is about 0.11, of which Heng Rui-like accounts for 0 and CSL accounted for the largest ratio of about 0.45. Meanwhile, this paper calculates the covariance and correlation coefficient between each asset. The correlation coefficient of each asset is obtained close to 0, and the correlation degree is low. Heng Rui Pharma is negatively correlated with Vanke, then this use is that the inclusion of AB in the portfolio at the same time will reduce the risk of the portfolio.