Construction of optimal portfolio under sharpe single index model: A comparative study on it and pharma sectors

Indian securities market is an exceedingly unpredictable and sensitive market where portfolio construction is exceptionally critical to get great returns. Accordingly the primary concentration of this research is to build an ideal value portfolio with the assistance of Sharpe index model. In this study, IT and PHARMA sectors have been thought about for building the ideal portfolios. Twenty companies have been selected and excess return to beta ratio has been calculated and ranked the companies based on that ratio. Ideal portfolios built for IT sector and PHARMA sector independently and thought about both the portfolios as far as portfolio return and risk. The cut-off point was ascertained in view of the most astounding worth and cut-off point should be used to calculate the proportion of money to be invested in each stocks. The outcomes of the study would be useful to investors for investing funds into IT and PHARMA sector and to choose which sector could give most elevated return at low risk.