Research on Investment Portfolios of the Low-Altitude Economy Sector in the Chinese Stock Market

Xueyu Zou ()
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Xueyu Zou: Fudan University

A chapter in Proceedings of the 2025 3rd International Academic Conference on Management Innovation and Economic Development (MIED 2025), 2025, pp 495-500 from Springer

Abstract: Abstract This paper focuses on the low-altitude economy sector in the Chinese stock market, aiming to explore the applicability of the Markowitz Portfolio Theory in this sector. Using Python as a tool, 14 financial indicators were selected as common factors from four dimensions: profitability, operational capacity, development potential, and capital expansion ability. After data processing and principal component analysis, the top four stocks with the highest comprehensive scores were selected to construct an investment portfolio. The closing price data of the selected stocks were used to calculate the annualized rate of return, annualized covariance matrix, etc. The 1-year Chinese treasury bond yield was used as the risk-free rate to construct the efficient frontier and determine the optimal investment portfolio. The results show that the volatility of the optimal investment portfolio is lower than the average volatility of individual stocks, and the rate of return is higher than the average rate of return of individual stocks, verifying the feasibility of the Markowitz Portfolio Theory in this sector. It provides theoretical references and investment suggestions for investors. However, it also points out that investment decisions should not rely too much on historical data and should be combined with the actual situation.

Keywords: Markowitz Portfolio Theory; Principal Component Analysis; Low-Altitude Economy Sector (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-835-6_53

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