Research on the Optimization Strategy of Chinese Concept Stock Investment Portfolio under Multiple Constraints Based on Markowitz and Index Model

This study analyses the strategic allocation of investment portfolios of Chinese concept stocks in the USS market, emphasizing the importance of these assets in global finance. It evaluates their historical performance and optimisation potential under different market constraints, using the Markowitz and Index Models as analytical frameworks. The research examines ten different Chinese stocks' data from the past decade to identify the best investment strategies in a sector that is inherently volatile and has growth potential. The analysis highlights the different risk-return profiles of the stocks, their independence by sector, and correlation dynamics. This provides a detailed plan for diversifying investments. The study demonstrates that Chinese concept stocks are relatively independent of the USS market and that both models provide solid risk-adjusted returns for the 10 Chinese concept stocks, even when the weighting of the market indexes is excluded. These findings enhance the theoretical discourse on portfolio optimization and offer actionable insights for investors navigating the complexities of international markets, particularly the nuanced Chinese concept stocks in the US. These insights are important for comprehending the integration and innovation in financial markets, particularly in light of China's increasing global economic influence.