Optimization Analysis Of Investment Portfolio Based On Hierarchical Linear Model And Information Entropy

In recent years,the securities market has gradually matured,and portfolio has become a hot topic.Investors hope to optimize the allocation of capital under the uncertainty of market risk.Therefore,in order to better help investors avoid risks and gain profits,this paper mainly selects high-quality stocks,and then makes a research and Analysis on the completion of the portfolio.Firstly,stock selection is based on the HLM model.From the micro level,this paper discusses the impact of financial indicators on the stock price of listed companies,focusing on the profitability and development ability of listed companies,and uses this model to determine the optimal index variables.In recent years,the stock price of Shanghai and Shenzhen 300 is regarded as the data with nested structure.The first level is the stock price of each stock in different years,and the second level is the financial index of different listed companies in different periods.The model is constructed and verified.The results show that the rate of return on net assets and the growth rate of operating profit have the greatest impact on the stock price.Investors can focus on these indicators of listed companies,and efficiently select the high-quality stocks suitable for investment from a large number of stock data.Secondly,after stock selection based on HLM,the portfolio model of information entropy is established.According to the results of the hierarchical model,10 stocks with excellent performance are selected.Finally,the risk of the portfolio is measured by information entropy and the portfolio is completed.In this paper,we use the idea of single index to decompose risk to decompose the information entropy of a single stock into mutual information entropy and conditional information entropy,which represent different risks respectively.In addition,we introduce beta coefficient as the weight to weight the mutual information entropy.At this time,the mutual information entropy can represent the systematic risk of this stock relative to other stocks,and then it can be added directly.The mean entropy model is established considering the transaction cost.At last,the entropy model is solved by using the mathematical software MATLAB in the case of determining the return,and the concise and effective result of the portfolio is obtained.The number of portfolio stocks is between one and two,which can avoid the potential high risk while ensuring the return rate,and help the investors to make the final decision.It alsoanalyzes the advantage of portfolio selection based on HLM model,which can help investors to select stocks and invest quickly.In this paper,the hierarchical linear model and the information entropy model are used in the stock market for the first time.Through the analysis of the stock data by the mathematical model,in a certain range of risk control,the investment decision-making is provided quickly and effectively for investors.