Portfolio Selection and Comparative Portfolio Analysis of Transportation Services, Hotel and Leisure, and Education Subsectors Against Service Sector in the Philippine Market Using Mean-variance Model

This paper presents a framework for portfolio selection in the transportation services, hotel and leisure, and education subsectors of the Philippine market using the mean-variance model. Using the service sector and the broader market as benchmarks, this study spans 7,670 test days from January 1, 1993, to December 31, 2022, identifying optimal risk-return factors (RRFs) of $\mathbf{0. 4}$ for transportation, 0.2 for hotel and leisure, and 0.3 for education. Furthermore, the higher percentage allocations the investors are recommended to invest in are International Container Terminal Services, Inc., Waterfront Philippines, Incorporated, and Far Eastern University, Incorporated. Paired t-test results, with p-values below 0.01 and 0.05, indicate these subsectors can outperform the service sector. The study also conducted a comparative analysis with 30-year historical data to crisis periods like the Global Financial Crisis (GFC) and the COVID-19 pandemic, exhibiting distinct performance trends and emphasizing the need for tailored strategies during economic disruptions. The findings of this research may provide an alternative portfolio selection model for investors seeking to optimize their investment portfolios.