The novel hybrid multiple criteria decision method BWM-Moora-N applied for investment funds prioritization

Victor Rosemberg Reis Mota (), Carlos Francisco Simões Gomes (), Diogo Ferreira Lima Silva () and Marcos Santos ()
Additional contact information
Victor Rosemberg Reis Mota: Universidade Federal Fluminense
Carlos Francisco Simões Gomes: Universidade Federal Fluminense
Diogo Ferreira Lima Silva: Universidade Federal Fluminense
Marcos Santos: Centro de Análises de Sistemas Navais (CASNAV)

Operational Research, 2024, vol. 24, issue 3, No 2, 43 pages

Abstract: Abstract This study presents a novel approach for ranking problems, named BWM-MOORA-N, which consists of a hybrid MCDM/A method based on BWM and MOORA. The proposed method is utilized to analyze a set of investment funds, considering the preferences of a financial analyst. The BWM-MOORA-N method utilizes BWM to determine the criteria weights, MOORA to order the alternatives, and an additional normalization procedure to ensure that the results are evaluated on a 0–1 scale. The final normalization prevents the presence of negative global evaluations, which makes it easier to interpret and visualize the results. In the application, 42 investment funds are ordered based on a set of criteria derived from real data provided by an investment advisory company. The decision-makers preferences, according to a financial expert, were modeled using an unstructured process of interviews conducted by a decision analyst. The results of the study include comparisons to risk-return metrics and a ranking obtained using a reference point approach that incorporates the Tchebycheff distance concept. Additionally, experiments were conducted to vary possible BWM input comparisons, and statistics from over 1000 simulations are provided. The proposed method produces coherent results, including a ranking of funds that reflects the significant importance given by the decision-maker to profitability and risk criteria. Furthermore, the additional normalization proves to be suitable for practical purposes. Finally, the simulation results provide detailed information for each alternative, including the mean and standard deviations of the global evaluation and the mode of the ranking position.

Keywords: BWM; MOORA; MCDM; MCDA; Investment funds (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s12351-024-00817-w Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:operea:v:24:y:2024:i:3:d:10.1007_s12351-024-00817-w

Ordering information: This journal article can be ordered from
https://www.springer ... search/journal/12351

DOI: 10.1007/s12351-024-00817-w

Access Statistics for this article

Operational Research is currently edited by Nikolaos F. Matsatsinis, John Psarras and Constantin Zopounidis

More articles in Operational Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().