Enhancing investment decisions in Indian stock market through MCDM approach

Arup Mitra, Arun Kumar Jalan, Prabir Biswas and Sayan Gupta

International Journal of Indian Culture and Business Management, 2025, vol. 35, issue 3, 291-327

Abstract: The purpose of this paper is to compare a set of Indian stocks listed in the Morgan Stanley Capital International (MSCI-114) Index. The present paper considers the fundamental performance of the stocks as a basis for comparison. A number of financial ratios have been used as criteria to compare the performance of the stocks. The underlying objective is to formulate a portfolio for investment decision-making. Since the decision-making is based on the performance of the stocks subject to multiple criteria, the current work presents a multiple-criteria decision-making (MCDM) framework. Priority of the criteria is based on objective information, and this study uses the inter-criteria correlation method for deriving the weight. It is compared and ranked as per their performance using a compromise solution-based model that trades off the criteria effect with considerable reliability and stability. Finally, the mean-variance (MV) model is incorporated for identifying adverse risks and optimising the portfolio.

Keywords: decision making; ratio; portfolio; investment; stock market; multiple-criteria decision-making; MCDM. (search for similar items in EconPapers)
Date: 2025
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