Minimum variance approach for sectoral diversification in investment
Abstract
This paper presents a sector-based portfolio optimization strategy for long-term investors seeking high returns with lower risk. Using historical NIFTY 50 data, we analyze sectoral performance and construct an optimized minimum variance portfolio (MVP). By leveraging sectoral diversification, volatility analysis, and risk-adjusted metrics, we identify resilient sectors and refine stock selection through an intra-sector MVP approach. The optimized portfolio consistently outperforms NIFTY 50 in risk-return efficiency, offering a robust framework for emerging market investors.
Fields of Study & Subjects
Risk and Portfolio Optimization
Financial Markets and Investment Strategies
Financial Analysis and Corporate Governance
Publication details
- Journal / source
- CRC Press eBooks
- Pages
- 54–61
- Publication date
- 17 February 2026
- Language
- EN
- Document type
- Book chapter