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Using Homogeneous Groupings in Portfolio Management

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Part of the book series: New Economic Windows ((NEW))

Abstract

Often, in situations of uncertainty in portfolio management, it is difficult to apply the numerical methods based on the linearity principle. When this happens it is possible to use nonnumeric techniques to assess the situations with a non linear attitude. One of the concepts that can be used in these situations is the concept of grouping.

In the last thirty years, several studies have tried to give good solutions to the problems of homogeneous groupings. For example, we could mention the Pichat algorithm, the affinities algorithms and several studies developed by the authors of this work.

In this paper, we use some topological axioms in order to develop an algorithm that is able to reduce the number of elements of the power sets of the related sets by connecting them to the sets that form the topologies. We will apply this algorithm in the grouping of titles listed in the Stock Exchange or in its dual perspective.

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Gil-Aluja, J., Gil-Lafuente, A.M., Gil-Lafuente, J. (2010). Using Homogeneous Groupings in Portfolio Management. In: Faggini, M., Vinci, C.P. (eds) Decision Theory and Choices: a Complexity Approach. New Economic Windows. Springer, Milano. https://doi.org/10.1007/978-88-470-1778-8_7

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