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Paper eres2010_154:
MARKET SEGMENTATION AND PORTFOLIO MANAGEMENT – AN ANALYSIS OF THE ITALIAN MARKET

id eres2010_154
authors Pischedda, Luigi; Manstretta, Davide; Martinez Diaz, Roberto
year 2010
title MARKET SEGMENTATION AND PORTFOLIO MANAGEMENT – AN ANALYSIS OF THE ITALIAN MARKET
source 17th Annual European Real Estate Society Conference in Milan, Italy
summary Real Estate investors rely on diversification as a tool to reduce the volatility of their portfolios’ performances. Diversification is the main channel to achieve overall risk reduction via combining together assets with different risk/return characteristics, as illustrated in Harry Markowitz’s Modern Portfolio Theory (MPT). However, property maintains a certain degree of uniqueness, due to the local and fixed nature of the assets, and its behaviour is idiosyncratic, unlike other financial assets. Market segmentation is a technique to achieve diversification by means of clustering together those assets sharing similarities, as far as performance is concerned. Grouping property assets in segments maximises the variance of returns across segments whilst minimising that of individual assets within each segment. The study has been carried out in the UK market showing insightful results for portfolio managers, and is now replicated for the Italian market, moving from the IPD standard segmentation to explore alternatives.
keywords Market Segmentation, Portfolio Management, Risk, Performance, Variance
series ERES:conference
email luigi.pischedda@ipd.com
more http://www.eres2010.org/index.asp?page=papers_download
content file.ppt (751,104 bytes)
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ratings
session Real Estate Risk & Portfolio Management
last changed 2010/08/04 20:47
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