IDEAS home Printed from https://ideas.repec.org/a/kra/journl/y2013i85p57-63.html
   My bibliography  Save this article

Size and property portfolio diversification in the modern portfolio theory context

Author

Listed:
  • Maciej Mañkowski

    (Uniwersytet Ekonomiczny w Krakowie, doktorant na Wydziale Ekonomii i Stosunków Miêdzynarodowych)

  • Mateusz Miko³ajczak

    (Polska Akademia Nauk, Instytut Nauk Geologicznych, Oœrodek Badawczy w Krakowie)

Abstract

This is the first article in Poland that discusses the problemof impact of property portfolio size on investment risk reduction. The rates of return and the risk of obtaining them for 112 properties of various designations in Cracow were analysed in the context of Modern Portfolio Theory. A variety of portfolios were designed, using different methods of selecting real estate. It was found that a greater number of portfolio components reduce the risk more efficiently than a smaller number of portfolio components. Studies have shown that the portfolio construction approach based on the selection of the most risky assets is characterized by a markedly higher risk compared with other methods (i.e. random selection and averaging). Regardless of the adopted criterion of the selection of components, the most effective risk reduction is in the range of 12-14 properties, and further portfolio size increase is inefficient for investments.

Suggested Citation

  • Maciej Mañkowski & Mateusz Miko³ajczak, 2013. "Size and property portfolio diversification in the modern portfolio theory context," World of Real Estate Journal (Swiat Nieruchomosci), Fundacja Uniwersytetu Ekonomicznego w Krakowie, issue 85, pages 57-63, September.
    • Handle: RePEc:kra:journl:y:2013:i:85:p:57-63
    DOI: 10.14659/worej.2013.85.08
    as

    Download full text from publisher

    File URL: http://swiatnieruchomosci.krakow.pl/pl/sklep/pojedyncze-artyku%C5%82y/2013/numer-85/artyku%C5%82-85-08
    Download Restriction: no
    File URL: https://libkey.io/10.14659/worej.2013.85.08?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kra:journl:y:2013:i:85:p:57-63. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Karolina Orzeł (email available below). General contact details of provider: https://edirc.repec.org/data/aekrapl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.