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Sparsity Regularized and Robust Mean Variance Portfolio Selection Under Ellipsoidal Uncertainty

arxiv.org/abs/2609.11749

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Updated 2 h ago · first seen 11 Sept 2026

paper_01M294FRD7GVK4X5FD8YEBH9CX

Published
11 Sept 2026
T1 · 2 h ago
arXiv
2609.11749
T1 · 2 h ago
Category
math.OC
T1 · 2 h ago

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9 claims · 9 properties

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https://arxiv.org/abs/2609.11749currentcurrentarXiv (Atom API + RSS)T1highdeterministic

Abstractabstract1

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We investigate mean-variance portfolio selection with an $\ell_0$-penalty to promote sparsity in asset allocations. Uncertainty in the mean return vector is incorporated through an ellipsoidal uncertainty set, yielding a robust sparse optimization framework. We characterize the structure of both local and global minimizers and exploit these properties in the risk minimization and return maximization formulations. Building on this structural insight, we develop a branch-and-bound algorithm tailored to the resulting robust sparse portfolio problems, together with a new pruning rule that can discard exponentially many candidate portfolios in a single step. Extensive computational experiments on real market data, together with comparisons against a mixed-integer second-order cone programming solver, demonstrate the effectiveness and competitiveness of the proposed approach.currentcurrentarXiv (Atom API + RSS)T1highdeterministic

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crosscurrentcurrentarXiv (Atom API + RSS)T1highdeterministic

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2609.11749currentcurrentarXiv (Atom API + RSS)T1highdeterministic

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Deniz Akkaya, Emre Can Yayla, Buse \c{S}en, Mustafa \c{C}. P{\i}narcurrentcurrentarXiv (Atom API + RSS)T1highdeterministic

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math.OC, cs.LG, stat.MLcurrentcurrentarXiv (Atom API + RSS)T1highdeterministic

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https://arxiv.org/pdf/2609.11749currentcurrentarXiv (Atom API + RSS)T1highdeterministic

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math.OCcurrentcurrentarXiv (Atom API + RSS)T1highdeterministic

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11 Sept 2026currentcurrentarXiv (Atom API + RSS)T1highdeterministic

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