Maria Kelly Venezuela

  1. Building portfolios of stocks in the S\~ao Paulo Stock Exchange using Random Matrix Theory.

    Authors: Leonidas Sandoval Junior, Adriana Bruscato, Maria Kelly Venezuela
    Subjects: Portfolio Management
    Abstract

    Using Random Matrix Theory, we build a covariance matrix between stocks of
    the BM&F-Bovespa (Bolsa de Valores, Mercadorias e Futuros de S\~ao Paulo) which
    is cleaned of some of the noise due to the complex interactions between the
    many stocks and the finiteness of available data, and use a regression model in
    order to remove the market effect due to the common movement of all stocks.
    These two procedures are then used in order to build portfolios of stocks based
    on Markovitz's theory, trying to build better predictions of future risk based
    on past data.

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