Download pdf
China's Low-altitude Economy Sector: Portfolio Strategy Construction and Analysis
- 1 College of Economics and Management, South China Agricultural University, Guangzhou, China
* Author to whom correspondence should be addressed.
Abstract
Markowitz's efficient frontier and the Capital Allocation Line (CAL) model, as classic paradigms for portfolio optimization, require theoretical and practical innovation in emerging industries, especially in risk-return optimization for innovation-driven sectors. This study, based on modern portfolio theory, constructs and empirically tests a five-asset allocation strategy for China's low-altitude economy. It selects five stocks with positive average returns from December 2021 to December 2024 in relevant fields (like airframe manufacturing, battery technology, and information navigation systems). Using monthly closing prices, it calculates individual stock return characteristics, analyzing their average returns, variance, and standard deviation. A multi-dimensional portfolio is built using a covariance matrix, the efficient frontier is determined through risk-return analysis, and a CAL is constructed with the 3-month Treasury bill risk-free rate to identify the optimal risk portfolio with maximum Sharpe ratio. The results demonstrate that the dynamic strategy's expected return (3.70%) significantly outperforms the CSI 300's average passive return (-0.46%) over three years, with controllable risk.
Keywords
Markowitz's efficient frontier and the Capital Allocation Line (CAL) model, as classic paradigms for portfolio optimization, require theoretical and practical innovation in emerging industries, especially in risk-return optimization for innovation-driven sectors. This study, based on modern portfolio theory, constructs and empirically tests a five-asset allocation strategy for China's low-altitude economy. It selects five stocks with positive average returns from December 2021 to December 2024 in relevant fields (like airframe manufacturing, battery technology, and information navigation systems). Using monthly closing prices, it calculates individual stock return characteristics, analyzing their average returns, variance, and standard deviation. A multi-dimensional portfolio is built using a covariance matrix, the efficient frontier is determined through risk-return analysis, and a CAL is constructed with the 3-month Treasury bill risk-free rate to identify the optimal risk portfolio with maximum Sharpe ratio. The results demonstrate that the dynamic strategy's expected return (3.70%) significantly outperforms the CSI 300's average passive return (-0.46%) over three years, with controllable risk.
[1]. Sun, X., Wang, S., Zhang, X., & Wandelt, S. (2025). LAERACE: Taking the policy fast-track towards low-altitude economy. Journal of the Air Transport Research Society, 100058.
[2]. Wang Ting, Gao Bo. 2024. Research on the Practical Path of Technology Finance Supporting the Development of Low altitude Economy [J/OL]. Enterprise Economy, (12): 153-160.
[3]. State Council. 2021. utline of the National Comprehensive Stereo Transportation Network Plan.
[4]. Changqing Huang, Shifeng Fang, Hua Wu, Yong Wang, Yichen Yang, 2024. Low-altitude intelligent transportation: System architecture, infrastructure, and key technologies, Journal of Industrial Information Integration, Volume 42, 100694, ISSN 2452-414X,
[5]. Wang, S. T., & Tan, C. (2025). Theoretical Mechanism, Core Principles and Action Principles of Low Altitude Economy Driving the Development of New Quality Productivity. Enterprise Technology and Development.
[6]. Kuang, Z., Liu, W., Wang, C., Jin, Z., Ren, J., Zhang, X., & Shen, Y. (2024). Movable-Antenna Array Empowered ISAC Systems for Low-Altitude Economy. arXiv preprint arXiv:2406.07374.
[7]. Wang, Z., Sun, G., Wang, Y., Yu, H., & Niyato, D. (2024). Cluster-Based Multi-Agent Task Scheduling for Space-Air-Ground Integrated Networks. arXiv preprint arXiv:2412.10700.
[8]. Data source: Choice Data - Financial Terminal, https://choice.eastmoney.com/
[9]. Wu, W. L., & Zhao, Liuyue. (2023). Research and empirical analysis of optimal portfolios of the Shenzhen Stock Exchange based on Markowitz's portfolio model. Journal of Xuzhou Institute of Technology(Natural Sciences Edition), 38(2), 17-28.
[10]. Jiechao Zhang, Yaolong Liu, Yao Zheng, 2024. Overall eVTOL aircraft design for urban air mobility, Green Energy and Intelligent Transportation, Volume 3, Issue 2, 100150, ISSN 2773-1537.
[11]. Zhang Peng. 2024. Research on the industry chain and mega-market advantage of low-altitude economy[J]. Public Relations World,(23):6-9.
[12]. Gong Shanshan. 2015. Empirical Analysis of Non-Systematic Risk of Listed Banks in China[J].. Journal of Henan College of Finance & Taxation, 29(1):38-41. DOI:10.3969/j.issn.1008-5793.2015.01.010.
Cite this article
Xie,Y. (2025). China's Low-altitude Economy Sector: Portfolio Strategy Construction and Analysis. Advances in Economics, Management and Political Sciences,180,55-60.
Data availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
Disclaimer/Publisher's Note
The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of EWA Publishing and/or the editor(s). EWA Publishing and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.
About volume
Volume title: Proceedings of the 3rd International Conference on Management Research and Economic Development
© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and
conditions of the Creative Commons Attribution (CC BY) license. Authors who
publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons
Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this
series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published
version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial
publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and
during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See
Open access policy for details).