The Research on the Investment Portfolio of New Energy Sector Based on Markowitz Model and the Index Model

Abstract: New energy sector stocks in the Chinese market continue to grow at a high rate for two years in 2020 and 2021, but start to retrace in 2022. In order to investigate whether the new energy sector is still worth investing in and to find the optimal portfolio for the new energy industry, this paper analyzes fifteen stocks in the new energy sector using the Markowitz model and the index model. The following conclusions are drawn: 1. Under the constraint that shorting is not allowed in China's stock market, the index model is still advantageous. 2.Investors are more inclined to invest in the Shanghai Composite Index when seeking minimum risk. 3. Under the condition of maximum Sharpe ratio, investors are more willing to invest in the BYD Company Limited, Contemporary Amperex Technology, and EVE Energy. There are many methods of portfolio model construction at this stage, but this paper only analyzes only the Markowitz model and the index model in depth. In the future, other models can be compared and analyzed in depth to get the most suitable portfolio model for the new energy industry.