Archive of Journal - Financing
Financing – scientific magazine for economy
ISSUE 2022, No. 2, Article 1, Year of publication: 13, June, 2022
Application of graph theory for the purpose of
diversifying the portfolio of stocks on the Banja
Luka stock exchange
AUTHORS
Saša Vujošević, PhD*; Jelena Poljašević, PhD**; Milan Lakićević, PhD***
*PhD Assistant Professor, University of Montenegro, Faculty of Economics in Podgorica, Department for Accounting and Business Finance
*PhD Associate Professor, University of Banja Luka, Faculty of Economics, Department for Accounting and Business Finance
*PhD Full Professor, University of Montenegro, Faculty of Economics in Podgorica, Department for Accounting and Business Finance
ABSTRACT
ARTICLE INFO
The graph theory has found great use in many areas, graphs can be used to model different problems. In economics various problems
can be successfully solved by applying the graph theory. The use of graph theory in order to optimize the stock portfolio is useful. In this
paper, we developed a characterization of the structure of the Banja Luka Stock Market from 2015. to 2021. By analysing the correlation
between different stocks and applying the graph theory, “the best” portfolio was identified and a recommendation was given for the safest
investments. This analysis allows diversification of the stock portfolio in order to avoid long term risk in the stock market.
Keywords: stock market, stock portfolio, portfolio optimization, graph theory, clique
DOI: 10.7251/FIN2202003V
Corresponding author:
jelena.poljasevic@ef.unibl.org