Calculation and Application of Stock Investment Strategy Using the Mean-Variance Model

Currently, Chinas stock market experiences significant fluctuations and is in a poor state. Investors urgently need a set of scientific methods to create a reasonable investment portfolio. This paper adopts the Mean-Variance Model and selects the domestic A-share market from October 29, 2021, to March 29, 2022, as the study period. It studies the frontier portfolio of each target stock based on prospective earnings and risk control. Finally, it determines the most appropriate investment portfolio to help investors minimize risk while maximizing returns. This paper uses mathematics to intuitively show why the worse the economic environment, the higher the investment risk. And further research finds that the greater the difference between selected target stocks, the greater the difference in weight ratio, and the smaller the number of stocks left in the final portfolio. At the same time, this paper introduces the real number optimization model to make the conclusion obtained from the mean variance model have universal applicability.