The Asset Allocation Analysis for Banking and Technology and Retail Industries

Abstract

With the outbreak of COVID-19 in 2020, the economies of almost all countries in the world have faced inevitable and significant losses. The GDP growth rate of major economies in the world has not improved or even declined. During the pandemic, many people lost their jobs, which meant they lost a regular source of income to support them; At this time, the money made by the way of making money online -- buying stocks, or various financial products -- is very important, and portfolio analysis is the first step to successful investment. In this paper, four of the most successful companies in the United States are selected for analysis. They are AAPL, AMZN, AXP, and JPM, which respectively involve the financial industry, banking, technology, and retail industry in the United States. This article uses three methods for portfolio optimization, which are called mean-variance analysis, CAPM Model and Fama French Three Factor Model, this paper calculates the weight proportion of four companies under Three different models. The results show that in mean-variance model has the highest projected revenue among the three models, while CAPM has the lowest projected revenue. Meanwhile, among the mean-variance models, AAPL has the highest proportion of investment, but among the CAPM and FF3F models, JPM, which has the worst performance in the mean-variance models, has the highest proportion. This research will benefit the related investors in financial markets.