Stock Investment Analysis Based On Portfolio Theory

In recent years, Chinese booming economy boosts listed companies' achievement, which makes a solid foundation for Chinese stock market, especially in 2007; Chinese stock market underwent a historical leap, which shocked the whole world. From the mature international market point of view, Chinese stock market is an emerging market; however, as the Chinese stock market grows, Chinese stock market will still maintain prosperous, Chinese excellent enterprises will continuously go public, which will exhibit the stock market's function of resources allocation.Along with Chinese stock market growing mature, how investors will invest in this kind of stock market? Generally speaking, stock investment involves two problems: the first problem is how to choose excellent investment items, this dissertation take stock investment for an example; the second one is how to choose investment portfolio when investors choose more than one stocks.To solve the first problem, investors need to appraise the listed companies, this dissertation is based on related document, finally chooses factor analysis and date envelope analysis, moreover, this dissertation takes theory into practice, so as to ensure investors get more reliable information about listed companies, assist investors to make rational investment decisions, and provide reference for improving efficiency of listed companies.To solve the second problem, this dissertation uses Markowitz's theory, which plays an important role for investors in the western developed capital market. This dissertation calculates investment portfolio return and risk, combining real stocks to calculate portfolio ratio.Finally, this dissertation uses data envelope analysis to validate investment portfolio ratio, and concludes that the portfolio ratio is effective, which means investors get the maximum return with minimum risk.