Single Index Model Portfolio Formation Application

Dewi, Lily Puspa and Handojo, Andreas and CHRISLIE, YOHANES MIRACLE MARIO (2017) Single Index Model Portfolio Formation Application. In: RICCES, 17-08-2017 - 17-08-2017, Langkawi - Malaysia.

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Abstract

Inflation is one of the main reasons why we need to invest, either on funds or assets that already exist or that we will have in order to have a value to be sustained and certainly expected to increase. Stocks are generally thought of as good inflation hedges over the long run as people are able to gain higher prices to offset rising costs. People always do the investment planning to choose which stock they will invest. It is necessary to determine the investment portfolio from various stocks to help investors decide the efficient combination stocks investment. This portfolio will assist investors to minimize the risk of stock investments, so that the risk of losses on the stock can be covered by gains on other stocks. This study developed system to form stocks portfolio used the Single Index Model which is a simplification of the Markowitz Model. The system is analyzed and tested using internal and external evaluation. The internal evaluation is based on the specification-based testing. Validation calculation of application is done by comparing the application result to the manual calculation. The system is able to run and show the result as expected. The second evaluation was performed by distributing questionnaires to 80 respondents as users. . In user interface, the score is 4.2, content and information of the application is 4.125, stock data processing is 4.925, provided features is 4.212, ease of use is 4.65 and finally users considered overall this application is 4.5875.

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