Data description for large-cap stock (TOPIX Core 30 + 70 Large).
\r\n\tContaminated water is not suitable for drinking, or use in recreation, agriculture, and industrial activities. These waters cause poisoning of drinking water, deterioration of river and lake ecosystems, decrease in biological diversity as a result of the death of aquatic life, and various environmental problems.
\r\n\r\n\tWater resources are limited however, the need for water is gradually increasing. Considering that water quality deteriorates increasingly, the importance of preserving existing water resources in terms of quantity and quality is increasing day by day. So, it is important to determine the sources of contamination correctly and to take the necessary precautions.
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Cabanelas",slug:"juan-c.-cabanelas"}]},{id:"36179",title:"Use of FTIR Analysis to Control the Self-Healing Functionality of Epoxy Resins",slug:"use-of-ft-ir-analysis-to-control-the-self-healing-functionality-of-epoxy-resins",signatures:"Liberata Guadagno and Marialuigia Raimondo",authors:[{id:"106836",title:"Prof.",name:"Liberata",middleName:null,surname:"Guadagno",fullName:"Liberata Guadagno",slug:"liberata-guadagno"}]},{id:"36180",title:"Infrared Analysis of Electrostatic Layer-By-Layer Polymer Membranes Having Characteristics of Heavy Metal Ion Desalination",slug:"infrared-analysis-of-electrostatic-layer-by-layer-polymer-membranes-having-characteristics-of-heavy",signatures:"Weimin Zhou, Huitan Fu and Takaomi Kobayashi",authors:[{id:"110384",title:"Dr.",name:"Takaomi",middleName:null,surname:"Kobayashi",fullName:"Takaomi Kobayashi",slug:"takaomi-kobayashi"}]},{id:"36181",title:"Infrared Spectroscopy as a Tool to Monitor Radiation Curing",slug:"infrared-spectroscopy-as-a-tool-to-monitor-radiation-curing",signatures:"Marco Sangermano, Patrick Meier and Spiros Tzavalas",authors:[{id:"112286",title:"Dr.",name:"Spiros",middleName:null,surname:"Tzavalas",fullName:"Spiros Tzavalas",slug:"spiros-tzavalas"},{id:"114382",title:"Prof.",name:"Marco",middleName:null,surname:"Sangermano",fullName:"Marco Sangermano",slug:"marco-sangermano"},{id:"114384",title:"Dr",name:"Patrick",middleName:null,surname:"Meier",fullName:"Patrick Meier",slug:"patrick-meier"}]},{id:"36182",title:"Characterization of Compositional Gradient Structure of Polymeric Materials by FTIR Technology",slug:"characterization-of-compositional-gradient-structure-of-polymeric-materials-by-ft-ir-technology",signatures:"Alata Hexig and Bayar Hexig",authors:[{id:"20867",title:"Dr.",name:"Bayar",middleName:null,surname:"Hexig",fullName:"Bayar Hexig",slug:"bayar-hexig"},{id:"111986",title:"Dr.",name:"Alata",middleName:null,surname:"Hexig",fullName:"Alata Hexig",slug:"alata-hexig"}]},{id:"36183",title:"Fourier Transform Infrared Spectroscopy - Useful Analytical Tool for Non-Destructive Analysis",slug:"fourier-trasform-infrared-spectroscopy-useful-analytical-tool-for-non-destructive-analysis",signatures:"Simona-Carmen Litescu, Eugenia D. Teodor, Georgiana-Ileana Truica, Andreia Tache and Gabriel-Lucian Radu",authors:[{id:"24425",title:"Dr.",name:"Simona Carmen",middleName:null,surname:"Litescu",fullName:"Simona Carmen Litescu",slug:"simona-carmen-litescu"},{id:"24429",title:"Prof.",name:"Gabriel-Lucian",middleName:null,surname:"Radu",fullName:"Gabriel-Lucian Radu",slug:"gabriel-lucian-radu"},{id:"108318",title:"Dr.",name:"Eugenia D.",middleName:null,surname:"Teodor",fullName:"Eugenia D. Teodor",slug:"eugenia-d.-teodor"},{id:"108323",title:"Dr.",name:"Georgiana-Ileana",middleName:null,surname:"Badea",fullName:"Georgiana-Ileana Badea",slug:"georgiana-ileana-badea"},{id:"136337",title:"Ms.",name:"Andreia",middleName:null,surname:"Tache",fullName:"Andreia Tache",slug:"andreia-tache"}]},{id:"36184",title:"Infrared Spectroscopy in the Analysis of Building and Construction Materials",slug:"infrared-spectroscopy-of-cementitious-materials",signatures:"Lucia Fernández-Carrasco, D. Torrens-Martín, L.M. Morales and Sagrario Martínez-Ramírez",authors:[{id:"107401",title:"Dr.",name:"Lucia J",middleName:null,surname:"Fernández",fullName:"Lucia J Fernández",slug:"lucia-j-fernandez"}]},{id:"36185",title:"Infrared Spectroscopy Techniques in the Characterization of SOFC Functional Ceramics",slug:"infrared-spectroscopy-techniques-in-the-characterization-of-sofc-functional-ceramics",signatures:"Daniel A. Macedo, Moisés R. Cesário, Graziele L. Souza, Beatriz Cela, Carlos A. Paskocimas, Antonio E. Martinelli, Dulce M. A. Melo and Rubens M. Nascimento",authors:[{id:"102015",title:"MSc.",name:"Daniel",middleName:null,surname:"Macedo",fullName:"Daniel Macedo",slug:"daniel-macedo"},{id:"112309",title:"MSc",name:"Moisés",middleName:"Romolos",surname:"Cesário",fullName:"Moisés Cesário",slug:"moises-cesario"},{id:"112310",title:"Ms.",name:"Graziele",middleName:null,surname:"Souza",fullName:"Graziele Souza",slug:"graziele-souza"},{id:"112311",title:"MSc.",name:"Beatriz",middleName:null,surname:"Cela",fullName:"Beatriz Cela",slug:"beatriz-cela"},{id:"112312",title:"Prof.",name:"Carlos",middleName:null,surname:"Paskocimas",fullName:"Carlos Paskocimas",slug:"carlos-paskocimas"},{id:"112314",title:"Prof.",name:"Antonio",middleName:null,surname:"Martinelli",fullName:"Antonio Martinelli",slug:"antonio-martinelli"},{id:"112315",title:"Prof.",name:"Dulce",middleName:null,surname:"Melo",fullName:"Dulce Melo",slug:"dulce-melo"},{id:"112316",title:"Dr.",name:"Rubens",middleName:"Maribondo Do",surname:"Nascimento",fullName:"Rubens Nascimento",slug:"rubens-nascimento"}]},{id:"36186",title:"Infrared Spectroscopy of Functionalized Magnetic Nanoparticles",slug:"infrared-spectroscopy-of-functionalized-magnetic-nanoparticles",signatures:"Perla E. García Casillas, Claudia A. Rodriguez Gonzalez and Carlos A. Martínez Pérez",authors:[{id:"104636",title:"Dr.",name:"Perla E.",middleName:null,surname:"García Casillas",fullName:"Perla E. García Casillas",slug:"perla-e.-garcia-casillas"},{id:"112440",title:"Dr.",name:"Carlos A.",middleName:null,surname:"Martínez Pérez",fullName:"Carlos A. Martínez Pérez",slug:"carlos-a.-martinez-perez"},{id:"112441",title:"Dr.",name:"Claudia A.",middleName:null,surname:"Rodriguez Gonzalez",fullName:"Claudia A. 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Marais",authors:[{id:"112229",title:"Prof.",name:"Chris",middleName:null,surname:"Aldrich",fullName:"Chris Aldrich",slug:"chris-aldrich"},{id:"112232",title:"Prof.",name:"Hansie",middleName:null,surname:"Knoetze",fullName:"Hansie Knoetze",slug:"hansie-knoetze"},{id:"135327",title:"Ms.",name:"Corne",middleName:null,surname:"Marais",fullName:"Corne Marais",slug:"corne-marais"}]},{id:"36189",title:"Optical Technologies for Determination of Pesticide Residue",slug:"optical-technology-for-determination-of-pesticide-residue",signatures:"Yankun Peng, Yongyu Li and Jingjing Chen",authors:[{id:"113343",title:"Prof.",name:"Yankun",middleName:null,surname:"Peng",fullName:"Yankun Peng",slug:"yankun-peng"},{id:"116636",title:"Dr.",name:"Yongyu",middleName:null,surname:"Li",fullName:"Yongyu Li",slug:"yongyu-li"},{id:"116637",title:"Dr.",name:"Jingjing",middleName:null,surname:"Chen",fullName:"Jingjing Chen",slug:"jingjing-chen"}]},{id:"36190",title:"High Resolution Far Infrared Spectra of the Semiconductor Alloys Obtained Using the Synchrotron Radiation as Source",slug:"high-resolution-spectra-of-semiconductor-s-alloys-obtained-using-the-far-infrared-synchrotron-radi",signatures:"E.M. Sheregii",authors:[{id:"102655",title:"Prof.",name:"Eugen",middleName:null,surname:"Sheregii",fullName:"Eugen Sheregii",slug:"eugen-sheregii"}]},{id:"36191",title:"Effective Reaction Monitoring of Intermediates by ATR-IR Spectroscopy Utilizing Fibre Optic Probes",slug:"effective-reaction-monitoring-of-intermediates-by-atr-ir-spectroscopy-utilizing-fibre-optic-probes",signatures:"Daniel Lumpi and Christian Braunshier",authors:[{id:"109019",title:"Dr.",name:"Christian",middleName:null,surname:"Braunshier",fullName:"Christian Braunshier",slug:"christian-braunshier"},{id:"111798",title:"MSc.",name:"Daniel",middleName:null,surname:"Lumpi",fullName:"Daniel Lumpi",slug:"daniel-lumpi"}]}]}],publishedBooks:[{type:"book",id:"6240",title:"Adaptive Robust Control Systems",subtitle:null,isOpenForSubmission:!1,hash:"19601f78e28ac1956912e5eeb6b834ac",slug:"adaptive-robust-control-systems",bookSignature:"Le Anh Tuan",coverURL:"https://cdn.intechopen.com/books/images_new/6240.jpg",editedByType:"Edited by",editors:[{id:"180551",title:"Prof.",name:"Anh Tuan",surname:"Le",slug:"anh-tuan-le",fullName:"Anh Tuan Le"}],equalEditorOne:null,equalEditorTwo:null,equalEditorThree:null,productType:{id:"1",chapterContentType:"chapter",authoredCaption:"Edited by"}},{type:"book",id:"9887",title:"Control Based on PID Framework",subtitle:"The Mutual Promotion of Control and Identification for Complex Systems",isOpenForSubmission:!1,hash:"d2dae75adf13d3e082893264d82967fb",slug:"control-based-on-pid-framework-the-mutual-promotion-of-control-and-identification-for-complex-systems",bookSignature:"Wei Wang",coverURL:"https://cdn.intechopen.com/books/images_new/9887.jpg",editedByType:"Edited by",editors:[{id:"101176",title:"Prof.",name:"Wei",surname:"Wang",slug:"wei-wang",fullName:"Wei Wang"}],equalEditorOne:null,equalEditorTwo:null,equalEditorThree:null,productType:{id:"1",chapterContentType:"chapter",authoredCaption:"Edited by"}},{type:"book",id:"10972",title:"Control Systems in Engineering and Optimization Techniques",subtitle:null,isOpenForSubmission:!1,hash:"f92f65447d0f90b67465865d41a61cd1",slug:"control-systems-in-engineering-and-optimization-techniques",bookSignature:"P. Balasubramaniam, Sathiyaraj Thambiayya, Kuru Ratnavelu and JinRong Wang",coverURL:"https://cdn.intechopen.com/books/images_new/10972.jpg",editedByType:"Edited by",editors:[{id:"252215",title:"Dr.",name:"P.",surname:"Balasubramaniam",slug:"p.-balasubramaniam",fullName:"P. Balasubramaniam"}],equalEditorOne:null,equalEditorTwo:null,equalEditorThree:null,productType:{id:"1",chapterContentType:"chapter",authoredCaption:"Edited by"}}],publishedBooksByAuthor:[]},onlineFirst:{chapter:{type:"chapter",id:"79884",title:"An Optimal Control Approach to Portfolio Diversification on Large Cap Stocks Traded in Tokyo Stock Exchange",doi:"10.5772/intechopen.100613",slug:"an-optimal-control-approach-to-portfolio-diversification-on-large-cap-stocks-traded-in-tokyo-stock-e",body:'Investment decision and capital allocation in the stock market is subjected to the variability of risk and return. Thus, the investors, as well as the portfolio manager, must find the best solutions to allocate the various assets efficiently. Constructing a portfolio of a stock based on the investor’s risk tolerance is a difficult task. In this situation, the portfolio manager needs to have some background knowledge in the economy of the market and mathematical modeling to create a portfolio based on the market participant’s appetite.
In the year 1952, Markowitz’s has introduced mean-variance portfolio optimization, where the investors are called rational investors by analyzing the mean and variance to determine the value of expected return and risk preference for investors [1]. This modern portfolio theory suggested that an investor can perform diversification in allocating assets in their portfolios by concerning how much risk they are willing to bear due to the outcome uncertainty in the stock market.
On the risk-return spectrum, some of the investor’s favor seeking an opportunity to invest in the large-cap stock due to its stability and safer investment during turbulent times. In this study, the Tokyo Stock Exchange (TSE) is chosen as a medium to implement modern portfolio theory since the TSE has remained the focal point for investors looking to invest in Asia\'s largest stock market, ranking third in the world behind the New York Stock Exchange and NASDAQ in 2018 [2]. Japan has also been recognized as a member of the G7, which includes the world\'s six major advanced economies: Canada, France, Italy, the United Kingdom, the United States, and Germany. However, in the last decade, Japan has undergone an economic crisis period and the emergence of China has become a threat to Japan’s economy. At some point, the systematic risk that occurred might affect the investor’s portfolio thus leaving the greatest risk if there is no proper plan in constructing the best portfolio strategy.
Hence, the mean-variance portfolio optimization remains widely used among investors in analyzing their portfolio investment due to its simplicity and ease of derivation [3]. Therefore, there are many previous researchers had done their study using this modern portfolio theory that was first introduced by Harry Markowitz. Kulali [1] claimed that individuals are mainly aiming to select the best diversification through these two related strategies as maximizing return or minimizing risk despite given the characteristics of the country’s stock market.
So, is the optimal portfolio being always the best portfolio diversification strategy? A lot of researchers have a debate regarding the issues of the mean-variance approach versus the 1/N strategy. Few researchers such as [4, 5, 6, 7] conducted to determine the best portfolio strategy on the various samples of the equity market. Similar results are found that naïve diversification has performed better compared to the optimization model. Ramilton [8], on the other hand, refuted DeMiguel et al. [6]’s claim that a naive portfolio is preferable to an ex-ante portfolio was preferable over the ex-ante optimal portfolio. He found out that the optimal portfolios significantly outperform the naïve portfolio strategy in terms of the Sharpe ratio. Other findings such as [9] explained that if the naïve model outperforms a more sophisticated model, it is a clear indicator that the modeling of the data generating process is not accurate enough. Other research [10, 11, 12] used the mean-variance model to optimize asset allocation, therefore, the result showed the mean-variance model outperformed the naïve diversification strategy.
The aim of this paper is briefly to construct the optimal portfolio by using by Markowitz mean-variance model and compare to the naïve diversification strategy in the context of large-cap stock in Tokyo Stock Exchange (TSE) over the three subperiods which are during the global financial crisis (GFC) (2008–2010), the post-global financial crisis (2011–2013), and the non-crisis period (2014–2018).
This study mainly focuses on the model parameters in determining the portfolio optimization construction by using mean-variance analysis on the large-cap stocks in Tokyo Stock Exchange (TSE). Then, we determine the best portfolio diversification strategy in the three subperiods tested.
The historical stock prices of the Japanese stocks are collected from the Bloomberg Terminal web page and treated as a primary source of data for this study. About 571 data of the stock prices of each stock were picked from the last trading day of every week and were then transformed to weekly return (adjusted price for Japanese Yen). The analysis based on the weekly return is conducted to avoid the non-synchronous trading effect [4].
Tokyo Stock Exchange has remained the largest stock exchange in Asia in terms of market capitalization. Thus, Table 1 shows about 10 large-cap stocks were chosen randomly upon the stocks that listed in the TOPIX Core 30 + 70 Large and are traded in Tokyo Stock Exchange. The selections of the stocks are the companies that already been existed during the period of this study.
Stocks code | Company name | Industry | |
---|---|---|---|
1 | 7201.T | Nissan Motor Co. Ltd. | Automobiles and transportation equipment |
2 | 7267.T | Honda Motor Co. Ltd | Automobiles and transportation equipment |
3 | 8411.T | Mizuho Financial Group, Inc. | Bank |
4 | 8306.T | Mitsubishi UFJ Financial Group, Inc. | Bank |
5 | 8035.T | Tokyo Electron | Electric appliances and precision instruments |
6 | 6702.T | Fujitsu | Electric appliances and precision instruments |
7 | 8801.T | Mitsui Fudosan | Real estate |
8 | 8802.T | Mitsubishi Estate | Real estate |
9 | 9342.T | Nippon Telegraph and Telephone Corporation | Information and communication |
10 | 9433.T | KDDI Corporation | Information and communication |
Data description for large-cap stock (TOPIX Core 30 + 70 Large).
The construction of the portfolio of the stocks will be based on 10 years. To look for the workability and superiority of the portfolio strategy in a different timeframe, the 10 years will be divided into three subperiods which are during the global financial crisis (GFC) (2008–2010), the post-global financial crisis (2011–2013), and during the non-crisis period (2014–2018).
The rate of return determines whether the investors gain or lose money from their investment [12]. In this study, we calculate the weekly stock return for stock
where
We calculate the average return of stocks based on the following equation:
where is an average return on stock
where is the proportion of the funds invested in stock
Garcia et al. [10] consider risk as uncertainty through the variability of future returns. So, we calculate the variance of stock
where,
Ivanovic et al. [12] were able to measure how the stocks vary together by determining the covariance of each stock. The dimensions of risk are organized in the covariance matrix which is denoted by
where,
Equation (6) can be interpreted as the sum of the distance for each value and from the mean is divided by the number of observations minus one. Then, the covariance enables us to calculate the correlation coefficient, shown as:
where
In this study, the standard deviation is used to measure the risk of the portfolio. The standard deviation of the portfolio is the most common statistical indicator of an asset’s risk which measures the dispersion around the expected value [12]. By means, the higher the risk, the higher value of standard deviation. Hence, the equation for standard deviation is defined as follows:
where,
Based on the parameters used in the Markowitz mean-variance model, we can get different combinations of expected return and risk. Every possible asset combination is known as an attainable set that can be plotted in risk-return space, and the collection of all such possible portfolios defines a region in this space. Figure 1 shows that the line along the upper edge of this region is known as the efficient frontier. It is defined as the best return of a portfolio with the lowest risk.
Efficient frontier [
In this study, the Sharpe ratio will be used to measure the portfolio performance that provides risk premium per unit of total risk, which is measured by the portfolio’s standard deviation of return. The risk premium is defined as the difference between portfolio return and the risk-free rate. It can be expressed in the following equation:
where
In this study, excel functions and data solvers are used for all calculations. The construction of portfolio optimization using the Markowitz mean-variance approach involves the following steps:
Step 1: Determining return and standard deviation of 10 stocks during three subperiods (Tables 2–4).
Stock | Average weekly return (GFC) | Weekly variance | Weekly standard deviation | Average annual return | Annual variance | Annual standard deviation |
---|---|---|---|---|---|---|
7201.T | −0.0005 | 0.0035 | 0.0596 | −0.0249 | 0.1845 | 0.4296 |
7267.T | 0.0012 | 0.0036 | 0.0601 | 0.0624 | 0.1876 | 0.4331 |
8411.T | −0.0052 | 0.0051 | 0.0716 | −0.2713 | 0.2666 | 0.5163 |
8306.T | −0.0033 | 0.0040 | 0.0633 | −0.1693 | 0.2086 | 0.4567 |
8035.T | 0.0008 | 0.0041 | 0.0643 | 0.0399 | 0.2152 | 0.4639 |
6702.T | −0.0001 | 0.0031 | 0.0554 | −0.0065 | 0.1594 | 0.3993 |
8801.T | 0.0000 | 0.0044 | 0.0665 | 0.0008 | 0.2301 | 0.4796 |
8802.T | −0.0012 | 0.0042 | 0.0648 | −0.0622 | 0.2186 | 0.4676 |
9342.T | −0.0013 | 0.0017 | 0.0417 | −0.0684 | 0.0903 | 0.3005 |
9433.T | −0.0023 | 0.0021 | 0.0458 | −0.1177 | 0.1092 | 0.3305 |
Risk and return of stocks during global financial crisis (GFC) (2008–2010).
Stocks | Average weekly return (post-GFC) | Weekly variance | Weekly standard deviation | Average annual return | Annual variance | Annual standard deviation |
---|---|---|---|---|---|---|
7201.T | 0.0017 | 0.0017 | 0.0414 | 0.0882 | 0.0891 | 0.2986 |
7267.T | 0.0027 | 0.0017 | 0.0410 | 0.1405 | 0.0875 | 0.2958 |
8411.T | 0.0031 | 0.0014 | 0.0380 | 0.1603 | 0.0752 | 0.2743 |
8306.T | 0.0035 | 0.0015 | 0.0393 | 0.1845 | 0.0803 | 0.2834 |
8035.T | 0.0018 | 0.0023 | 0.0476 | 0.0931 | 0.1177 | 0.3431 |
6702.T | 0.0009 | 0.0022 | 0.0471 | 0.0453 | 0.1153 | 0.3395 |
8801.T | 0.0065 | 0.0024 | 0.0490 | 0.3373 | 0.1249 | 0.3533 |
8802.T | 0.0057 | 0.0023 | 0.0477 | 0.2968 | 0.1181 | 0.3436 |
9342.T | 0.0030 | 0.0007 | 0.0271 | 0.1552 | 0.0383 | 0.1957 |
9433.T | 0.0073 | 0.0016 | 0.0404 | 0.3799 | 0.0849 | 0.2914 |
Risk and return of stocks during post-global financial crisis (2011–2013).
Stocks | Average weekly return (post-GFC) | Weekly variance | Weekly standard deviation | Average annual return | Annual variance | Annual standard deviation |
---|---|---|---|---|---|---|
7201.T | 0.001 | 0.001 | 0.035 | 0.030 | 0.062 | 0.249 |
7267.T | −0.001 | 0.002 | 0.041 | −0.049 | 0.087 | 0.296 |
8411.T | −0.001 | 0.001 | 0.038 | −0.028 | 0.076 | 0.275 |
8306.T | 0.000 | 0.002 | 0.040 | 0.000 | 0.082 | 0.286 |
8035.T | 0.004 | 0.002 | 0.048 | 0.217 | 0.119 | 0.345 |
6702.T | 0.002 | 0.002 | 0.048 | 0.101 | 0.121 | 0.349 |
8801.T | −0.001 | 0.002 | 0.050 | −0.041 | 0.129 | 0.359 |
8802.T | −0.002 | 0.002 | 0.049 | −0.079 | 0.125 | 0.353 |
9342.T | 0.002 | 0.001 | 0.027 | 0.115 | 0.039 | 0.198 |
9433.T | 0.001 | 0.002 | 0.040 | 0.071 | 0.084 | 0.290 |
Risk and return of stocks during non-crisis period (2014–2018).
Step 2: Creating correlations matrix (Tables 5–7).
7201.T | 7267.T | 8411.T | 8306.T | 8035.T | 6702.T | 8801.T | 8802.T | 9342.T | 9433.T | |
---|---|---|---|---|---|---|---|---|---|---|
7201.T | 1.0000 | |||||||||
7267.T | 0.7219 | 1.0000 | ||||||||
8411.T | 0.2307 | 0.3298 | 1.0000 | |||||||
8306.T | 0.4480 | 0.5110 | 0.4336 | 1.0000 | ||||||
8035.T | 0.6080 | 0.5780 | 0.3285 | 0.5550 | 1.0000 | |||||
6702.T | 0.4944 | 0.5349 | 0.3392 | 0.4581 | 0.5457 | 1.0000 | ||||
8801.T | 0.4380 | 0.4951 | 0.2525 | 0.6559 | 0.5903 | 0.3973 | 1.0000 | |||
8802.T | 0.4247 | 0.4908 | 0.2504 | 0.6595 | 0.6089 | 0.4247 | 0.9345 | 1.0000 | ||
9342.T | 0.1628 | 0.1932 | 0.6257 | −0.0272 | 0.1526 | 0.0968 | 0.0145 | 0.0151 | 1.0000 | |
9433.T | 0.0116 | 0.1050 | 0.3155 | 0.0058 | 0.1032 | 0.1025 | −0.0161 | −0.0193 | 0.5407 | 1.0000 |
Correlation matrix during GFC (2008–2010).
7201.T | 7267.T | 8411.T | 8306.T | 8035.T | 6702.T | 8801.T | 8802.T | 9342.T | 9433.T | |
---|---|---|---|---|---|---|---|---|---|---|
7201.T | 1.0000 | |||||||||
7267.T | 0.7637 | 1.0000 | ||||||||
8411.T | 0.5127 | 0.6103 | 1.0000 | |||||||
8306.T | 0.5722 | 0.6906 | 0.8291 | 1.0000 | ||||||
8035.T | 0.5211 | 0.5929 | 0.4321 | 0.4715 | 1.0000 | |||||
6702.T | 0.5485 | 0.6442 | 0.5812 | 0.5465 | 0.4767 | 1.0000 | ||||
8801.T | 0.4850 | 0.5510 | 0.5963 | 0.7078 | 0.4016 | 0.4785 | 1.0000 | |||
8802.T | 0.4617 | 0.5707 | 0.5644 | 0.6776 | 0.3914 | 0.4632 | 0.9088 | 1.0000 | ||
9342.T | 0.4512 | 0.4152 | 0.5442 | 0.5402 | 0.4066 | 0.4524 | 0.3644 | 0.2784 | 1.0000 | |
9433.T | 0.0571 | 0.1661 | 0.1578 | 0.1544 | −0.0024 | 0.0445 | 0.1061 | 0.1138 | −0.0014 | 1.0000 |
Correlation matrix during post-GFC (2010–2013).
7201.T | 7267.T | 8411.T | 8306.T | 8035.T | 6702.T | 8801.T | 8802.T | 9342.T | 9433.T | |
---|---|---|---|---|---|---|---|---|---|---|
7201.T | 1.0000 | |||||||||
7267.T | 0.7103 | 1.0000 | ||||||||
8411.T | 0.7115 | 0.7206 | 1.0000 | |||||||
8306.T | 0.6906 | 0.7406 | 0.9125 | 1.0000 | ||||||
8035.T | 0.4873 | 0.4708 | 0.4467 | 0.4460 | 1.0000 | |||||
6702.T | 0.3999 | 0.5016 | 0.4878 | 0.5004 | 0.4169 | 1.0000 | ||||
8801.T | 0.5912 | 0.6267 | 0.6363 | 0.6740 | 0.3856 | 0.3891 | 1.0000 | |||
8802.T | 0.5492 | 0.6149 | 0.6176 | 0.6445 | 0.3753 | 0.3685 | 0.8805 | 1.0000 | ||
9342.T | 0.3704 | 0.3668 | 0.3275 | 0.3107 | 0.2708 | 0.1538 | 0.4520 | 0.4683 | 1.0000 | |
9433.T | 0.3592 | 0.3631 | 0.3555 | 0.3454 | 0.2831 | 0.1806 | 0.4431 | 0.5035 | 0.6966 | 1.0000 |
Correlation matrix during the non-crisis period (2014–2018).
Step 3: Creating variance-covariance matrices during three subperiods (Tables 8–10).
Stock | 7201.T | 7267.T | 8411.T | 8306.T | 8035.T | 6702.T | 8801.T | 8802.T | 9342.T | 9433.T |
---|---|---|---|---|---|---|---|---|---|---|
7201.T | 0.0035 | 0.0026 | 0.0016 | 0.0017 | 0.0023 | 0.0016 | 0.0017 | 0.0016 | 0.0004 | 0.0007 |
7267.T | 0.0026 | 0.0036 | 0.0020 | 0.0019 | 0.0022 | 0.0018 | 0.0020 | 0.0019 | 0.0005 | 0.0009 |
8411.T | 0.0016 | 0.0020 | 0.0051 | 0.0039 | 0.0024 | 0.0020 | 0.0029 | 0.0027 | 0.0010 | 0.0008 |
8306.T | 0.0017 | 0.0019 | 0.0039 | 0.0040 | 0.0023 | 0.0016 | 0.0027 | 0.0027 | 0.0008 | 0.0009 |
8035.T | 0.0023 | 0.0022 | 0.0024 | 0.0023 | 0.0041 | 0.0019 | 0.0025 | 0.0025 | 0.0005 | 0.0010 |
6702.T | 0.0016 | 0.0018 | 0.0020 | 0.0016 | 0.0019 | 0.0031 | 0.0014 | 0.0015 | 0.0009 | 0.0008 |
8801.T | 0.0017 | 0.0020 | 0.0029 | 0.0027 | 0.0025 | 0.0014 | 0.0044 | 0.0041 | 0.0008 | 0.0014 |
8802.T | 0.0016 | 0.0019 | 0.0027 | 0.0027 | 0.0025 | 0.0015 | 0.0041 | 0.0042 | 0.0008 | 0.0012 |
9342.T | 0.0004 | 0.0005 | 0.0010 | 0.0008 | 0.0005 | 0.0009 | 0.0008 | 0.0008 | 0.0017 | 0.0012 |
9433.T | 0.0007 | 0.0009 | 0.0008 | 0.0009 | 0.0010 | 0.0008 | 0.0014 | 0.0012 | 0.0012 | 0.0021 |
Variance-covariance matrix during GFC.
Stock | 7201.T | 7267.T | 8411.T | 8306.T | 8035.T | 6702.T | 8801.T | 8802.T | 9342.T | 9433.T |
---|---|---|---|---|---|---|---|---|---|---|
7201.T | 0.0017 | 0.0013 | 0.0008 | 0.0009 | 0.0010 | 0.0011 | 0.0010 | 0.0009 | 0.0005 | 0.0003 |
7267.T | 0.0013 | 0.0017 | 0.0010 | 0.0011 | 0.0012 | 0.0013 | 0.0011 | 0.0011 | 0.0005 | 0.0004 |
8411.T | 0.0008 | 0.0010 | 0.0015 | 0.0012 | 0.0008 | 0.0010 | 0.0011 | 0.0010 | 0.0006 | 0.0005 |
8306.T | 0.0009 | 0.0011 | 0.0012 | 0.0016 | 0.0009 | 0.0010 | 0.0014 | 0.0013 | 0.0006 | 0.0005 |
8035.T | 0.0010 | 0.0012 | 0.0008 | 0.0009 | 0.0023 | 0.0011 | 0.0009 | 0.0009 | 0.0005 | 0.0006 |
6702.T | 0.0011 | 0.0013 | 0.0010 | 0.0010 | 0.0011 | 0.0022 | 0.0011 | 0.0011 | 0.0006 | 0.0004 |
8801.T | 0.0010 | 0.0011 | 0.0011 | 0.0014 | 0.0009 | 0.0011 | 0.0024 | 0.0021 | 0.0005 | 0.0005 |
8802.T | 0.0009 | 0.0011 | 0.0010 | 0.0013 | 0.0009 | 0.0011 | 0.0021 | 0.0023 | 0.0003 | 0.0005 |
9342.T | 0.0005 | 0.0005 | 0.0006 | 0.0006 | 0.0005 | 0.0006 | 0.0005 | 0.0003 | 0.0007 | 0.0005 |
9433.T | 0.0003 | 0.0004 | 0.0005 | 0.0005 | 0.0006 | 0.0004 | 0.0005 | 0.0005 | 0.0005 | 0.0016 |
Variance-covariance matrix during post-GFC.
Stock | 7201.T | 7267.T | 8411.T | 8306.T | 8035.T | 6702.T | 8801.T | 8802.T | 9342.T | 9433.T |
---|---|---|---|---|---|---|---|---|---|---|
7201.T | 0.0020 | 0.0014 | 0.0014 | 0.0018 | 0.0014 | 0.0011 | 0.0014 | 0.0012 | 0.0006 | 0.0007 |
7267.T | 0.0014 | 0.0021 | 0.0014 | 0.0020 | 0.0013 | 0.0014 | 0.0016 | 0.0015 | 0.0006 | 0.0007 |
8411.T | 0.0014 | 0.0014 | 0.0020 | 0.0023 | 0.0012 | 0.0013 | 0.0015 | 0.0014 | 0.0005 | 0.0007 |
8306.T | 0.0018 | 0.0020 | 0.0023 | 0.0034 | 0.0016 | 0.0017 | 0.0021 | 0.0019 | 0.0007 | 0.0009 |
8035.T | 0.0014 | 0.0013 | 0.0012 | 0.0016 | 0.0040 | 0.0016 | 0.0013 | 0.0012 | 0.0006 | 0.0008 |
6702.T | 0.0011 | 0.0014 | 0.0013 | 0.0017 | 0.0016 | 0.0035 | 0.0013 | 0.0011 | 0.0004 | 0.0005 |
8801.T | 0.0014 | 0.0016 | 0.0015 | 0.0021 | 0.0013 | 0.0013 | 0.0030 | 0.0025 | 0.0010 | 0.0011 |
8802.T | 0.0012 | 0.0015 | 0.0014 | 0.0019 | 0.0012 | 0.0011 | 0.0025 | 0.0027 | 0.0009 | 0.0012 |
9342.T | 0.0006 | 0.0006 | 0.0005 | 0.0007 | 0.0006 | 0.0004 | 0.0010 | 0.0009 | 0.0015 | 0.0012 |
9433.T | 0.0007 | 0.0007 | 0.0007 | 0.0009 | 0.0008 | 0.0005 | 0.0011 | 0.0012 | 0.0012 | 0.0021 |
Variance-covariance matrix during non-crisis period.
Step 4: Calculating the volatility and return of the portfolio with equal weight (Table 11).
Period | Portfolio return | Portfolio variance | Portfolio standard deviation |
---|---|---|---|
During GFC | −0.0012 | 0.0019 | 0.0435 |
Post-GFC | 0.0036 | 0.0010 | 0.0310 |
Non-crisis | 0.0006 | 0.0014 | 0.0372 |
Portfolio with equal weight (naïve diversification).
Step 5: Calculating the volatility and return of the portfolio with difference weights (Tables 12–14 (all three tables in the Appendices).
Portfolio return | Portfolio standard deviation | Weight of stock | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
7201.T | 7267.T | 8411.T | 8306.T | 8035.T | 6702.T | 8801.T | 8802.T | 9342.T | 9433.T | |||
Portfolio 1 | −0.0004 | 0.0366 | 0.0441 | 0.2204 | 0 | 0 | 0.1213 | 0.0578 | 0.0071 | 0 | 0.5418 | 0.0075 |
Portfolio 2 | −0.0003 | 0.0370 | 0.0158 | 0.2558 | 0 | 0 | 0.1360 | 0.0576 | 0.0050 | 0 | 0.5298 | 0 |
Portfolio 3 | −0.0002 | 0.0376 | 0 | 0.2927 | 0 | 0 | 0.1503 | 0.0552 | 0.0002 | 0 | 0.5017 | 0 |
Portfolio 4 | −0.0001 | 0.0383 | 0 | 0.3268 | 0 | 0 | 0.1602 | 0.0500 | 0 | 0 | 0.4630 | 0 |
Portfolio 5 | 0.0000 | 0.0392 | 0 | 0.3607 | 0 | 0 | 0.1701 | 0.0450 | 0 | 0 | 0.4242 | 0 |
Portfolio 6 | 0.0002 | 0.0413 | 0 | 0.4285 | 0 | 0 | 0.1899 | 0.0351 | 0 | 0 | 0.3465 | 0 |
Portfolio 7 | 0.0004 | 0.0440 | 0 | 0.4964 | 0 | 0 | 0.2097 | 0.0252 | 0 | 0 | 0.2688 | 0 |
Portfolio 8 | 0.0006 | 0.0471 | 0 | 0.5642 | 0 | 0 | 0.2294 | 0.0152 | 0 | 0 | 0.1911 | 0 |
Portfolio 9 | 0.0008 | 0.0505 | 0 | 0.6321 | 0 | 0 | 0.2492 | 0.0053 | 0 | 0 | 0.1134 | 0 |
Portfolio 10 | 0.0010 | 0.0541 | 0 | 0.6988 | 0 | 0 | 0.2676 | 0 | 0 | 0 | 0.0335 | 0 |
Composition of weight and risk of different expected return portfolios during GFC period.
Portfolio return | Portfolio standard deviation | Weight of stock | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
7201.T | 7267.T | 8411.T | 8306.T | 8035.T | 6702.T | 8801.T | 8802.T | 9342.T | 9433.T | |||
Portfolio 1 | 0.0009 | 0.0464 | 0.0350 | 0 | 0 | 0 | 0 | 0.9650 | 0 | 0 | 0 | 0 |
Portfolio 2 | 0.0010 | 0.0437 | 0.1561 | 0 | 0 | 0 | 0 | 0.8439 | 0 | 0 | 0 | 0 |
Portfolio 3 | 0.0020 | 0.0299 | 0.2235 | 0 | 0 | 0 | 0.0862 | 0.2812 | 0 | 0 | 0.4091 | 0 |
Portfolio 4 | 0.0030 | 0.02588 | 0.1318 | 0 | 0.0182 | 0 | 0.0377 | 0.0341 | 0 | 0.0425 | 0.6933 | 0.0426 |
Portfolio 5 | 0.0040 | 0.0252 | 0.0710 | 0 | 0 | 0 | 0 | 0 | 0 | 0.1197 | 0.6170 | 0.1813 |
Portfolio 6 | 0.0050 | 0.0267 | 0 | 0 | 0 | 0 | 0 | 0 | 0.0743 | 0.1165 | 0.4765 | 0.3327 |
Portfolio 7 | 0.0055 | 0.0281 | 0 | 0 | 0 | 0 | 0 | 0 | 0.1656 | 0.0522 | 0.3673 | 0.4150 |
Portfolio 8 | 0.0060 | 0.03 | 0 | 0 | 0 | 0 | 0 | 0 | 0.2467 | 0 | 0.2555 | 0.4978 |
Portfolio 9 | 0.0065 | 0.0322 | 0 | 0 | 0 | 0 | 0 | 0 | 0.2842 | 0 | 0.1326 | 0.5832 |
Portfolio 10 | 0.0070 | 0.0347 | 0 | 0 | 0 | 0 | 0 | 0 | 0.3216 | 0 | 0.0098 | 0.6686 |
Composition of weight and risk of different expected return portfolios during post-GFC period.
Portfolio return | Portfolio standard deviation | Weight of stock | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
7201.T | 7267.T | 8411.T | 8306.T | 8035.T | 6702.T | 8801.T | 8802.T | 9342.T | 9433.T | |||
Portfolio 1 | 0.0006 | 0.0331 | 0.0579 | 0.1859 | 0.2419 | 0 | 0 | 0.0389 | 0 | 0.0465 | 0.3273 | 0.1016 |
Portfolio 2 | 0.0008 | 0.0327 | 0.0774 | 0.1554 | 0.2273 | 0 | 0 | 0.0585 | 0 | 0.0195 | 0.3602 | 0.1018 |
Portfolio 3 | 0.0009 | 0.0325 | 0.0869 | 0.1401 | 0.2198 | 0 | 0 | 0.0683 | 0 | 0.0062 | 0.3767 | 0.1020 |
Portfolio 4 | 0.0010 | 0.0323 | 0.0985 | 0.1192 | 0.2085 | 0 | 0 | 0.0795 | 0 | 0 | 0.3946 | 0.0997 |
Portfolio 5 | 0.0015 | 0.0322 | 0.1379 | 0.0138 | 0.1478 | 0 | 0.0305 | 0.1212 | 0 | 0 | 0.4687 | 0.0801 |
Portfolio 6 | 0.0020 | 0.0328 | 0.1324 | 0 | 0.0393 | 0 | 0.0969 | 0.1442 | 0 | 0 | 0.5373 | 0.0499 |
Portfolio 7 | 0.0025 | 0.0344 | 0.0331 | 0 | 0 | 0 | 0.1938 | 0.1506 | 0 | 0 | 0.6226 | 0 |
Portfolio 8 | 0.0030 | 0.0385 | 0 | 0 | 0 | 0 | 0.4072 | 0.0402 | 0 | 0 | 0.5525 | 0 |
Portfolio 9 | 0.0035 | 0.0468 | 0 | 0 | 0 | 0 | 0.6586 | 0 | 0 | 0 | 0.3414 | 0 |
Portfolio 10 | 0.0040 | 0.0587 | 0 | 0 | 0 | 0 | 0.9157 | 0 | 0 | 0 | 0.0843 | 0 |
Composition of weight and risk of different expected return portfolios during non-crisis period.
Step 6: Creating an efficient frontier (Figure 2A–C).
(a) Efficient frontier of portfolios during GFC, (b) efficient frontier of portfolios during post-GFC, and (c) efficient frontier of portfolios during the non-crisis period.
Table 2 reflects during GFC from 2008 to 2010, most of the stock were volatile at high risk and yielding negative returns since the bearish market except Honda Motor, Tokyo Electron, and Mitsui Fudosan which annual returns vary from 0.08 to 6.24%. The risks of 10 stocks vary from 30.05 to 51.63% and Mizuho Financial Group, Inc. has the highest risk recorded during the crisis. As seen from Table 3, all stocks are yielding positive returns ranging from 4.53 to 33.73% during the period of post-GFC. Mitsui Fudosan lead the market with the highest annual return and the lowest annual return is Fujitsu. Despite the fact that the annual returns show a difference, both stocks are significantly risky, with risk levels ranging between 35.33 and 33.95%. Table 4 shows during the non-crisis period, about four stocks have poor performance with a negative rate of return. The remaining stocks are ranging from 0.00 to 21.7%. Tokyo Electron is dominating the market with the highest return and the Mitsubishi UFJ Financial Group, Inc. is recovering with the lowest return. The risks of each stock are varying from 19.8 to 35.3% which is dominated by the Mitsui Fudosan. The lowest risk recorded is from Nippon Telegraph and Telephone Corporation. Thus, apart from the results of the risk and return of the individual stock from the three subperiods, the variation of risks per weekly and annual basis has indicated that there is a chance of high variability of investment.
Correlation between assets determines the degree of portfolio risk [11]. Negative or small correlation between assets, the risk of the portfolio is low whereas the positive or large correlation between the assets, the risk of the portfolio is high. As seen in Table 5, only 9342.T–8306.T, 9433.T–8801.T, and 9433.T–8802.T have a negative correlation between the stocks and others are greater than zero. Table 6 reflects that only two pairs of stocks which are 9433.T–8035.T and 9433.T–9342.T have a negative correlation and Table 7 has all positive correlation between the stocks and not low enough. In that sense, only during the non-crisis period the portfolio constructed will not be well diversified.
When there are more than two assets, covariance can best be calculated by using matrix algebra based on Eq. (6). The covariance calculation which involved the excess return of stocks and the number of observations in each subperiod allows us to compute by using few functions in excel such as @MMULT(…) and TRANSPOSE(…). The procedure has already allowed us to determine the variance-covariance matrix as per Tables 8–10. The values of the variance-covariance matrices have shown that in the three subperiods tested, all the stocks are move in the same direction with a lower degree. Thus, this indicates that the volatility can be reduced during the construction of the portfolios.
The variance-covariance matrix helps in a simple way of measuring portfolio variance. At this step, the portfolio return and portfolio variance can be calculated. In this sense, the naïve allocation of weight whereby the equal proportion in the portfolio is used to calculate the portfolio return and portfolio variance. Since we have 10 stocks, each stock will have about 1/10 or 10% weight.
So, Table 11 shows that the portfolio returns and portfolio variance of the naïve diversification strategy. Among the three subperiods, during GFC, the portfolio indicates poor performance by having a negative return of −0.12% and the highest standard deviation of 4.35%. In contrast, the portfolio return is recorded high during post-GFC which is about 0.36% with the lowest standard deviation of 3.10%.
Note that, Markowitz’s mean-variance model stated that the investor must be rational and risk-averse [16]. Thus, in constructing the efficient portfolios, two conditions need to be satisfied which are maximum return for varying levels of risk and minimum risk for varying levels of expected return. In the context of three subperiods tested, this study proposed rational investors for looking at optimal portfolio with a minimum level of risk. Thus, this optimal portfolio analysis can be shown as the subject function according to the formula:
where
Then, three main constrains in Markowitz mean-variance portfolio optimization are included for the optimization problem. The formulas are written as:
and
where
Hence, Excel Solver is used to optimizing the weight by including all the constraints according to Eqs. (10)–(13). About 10 iterations were done in Solver to generate 10 portfolios. The 10 portfolios that are generated produce 10 different sets of weights for the level of return which minimizes the standard deviation of the portfolio. All the results are shown in Tables 12–14 (in Appendices) indicate the composition of stocks, portfolio return, and portfolio risk. All the set of possible expected return and risk combinations is then called attainable set [1]. The attainable set is plotted on the risk-return space as shown in Figure 2A–C.
Figure 2A–C demonstrate the efficient frontier with minimum variance portfolios. Ivanova et al. [11] states that given expected return, investors could choose an optimal portfolio based on risk preference since all the efficient portfolios are located over the efficient frontier curve. Many portfolios are existed on the efficient frontier curve with different risk and return combinations. Then, the optimal portfolio is selected on the efficient frontier curve in each subperiods then compare with the portfolio return and risk for naïve diversification strategy.
Table 15 reflects the analysis on the risk, return and performance of the portfolio constructed by using naïve diversification strategy and Markowitz mean-variance portfolio optimization. In the three subperiods tested, the optimal portfolio outperformed the naïve diversification strategy.
Period | Diversification strategy | Portfolio return | Portfolio standard deviation | Sharpe ratio |
---|---|---|---|---|
During GFC (2008–2009) | Naïve strategy | −0.0012 | 0.0435 | −0.1047 |
Optimal portfolio 8 | 0.0006 | 0.0471 | −0.0349 | |
Post-GFC (2011–2013) | Naïve strategy | 0.0036 | 0.031 | 0.0437 |
Optimal Portfolio 6 | 0.005 | 0.0267 | 0.1032 | |
Non-crisis period (2014–2018) | Naïve strategy | 0.0006 | 0.0372 | 0.0027 |
Optimal portfolio 7 | 0.0025 | 0.0344 | 0.0582 |
Comparison of portfolio risk, return, and performance evaluation.
In terms of portfolio risk-return, optimal portfolios selected during global financial crisis tend to have a high standard deviation of 4.71% compared to naïve diversification which is about 4.35%, respectively. But, the portfolio with equal weight yields an abnormal return of −0.12% compared to the optimal portfolio of 0.06%. This is not a surprising result since the turbulence of economic recession contributes to the high-risk investment. During the post-GFC, again the optimal portfolio yields a higher return with 0.5% with lower risk at 2.67% compared to the naïve strategy. Furthermore, there is not much difference in standard deviation for both strategies in the non-crisis period, but the optimal portfolio still dominates with a high return at 2.5% and low risk at 3.44%.
Sharpe ratio classifies during financial crisis both strategies produce negative Sharpe ratio which indicates the portfolio’s return is less than the risk-free rate. Thus, the interpretation of the negative Sharpe ratio will be put aside since it does not convey any useful meaning. For the rest two periods, the Sharpe ratio is undoubtedly the highest for the optimal portfolio compare to the naïve portfolio. This shows the reward-to-volatility ratio when investing in the optimal portfolio 6 and portfolio 7 are 0.1032 and 0.0582.
This study was aimed to help investors to plan for the best investment strategy in maximizing return with the given level of risk or minimizing risk. In this study, there are subperiods been tested for this whole study, during the global financial crisis (GFC) 2008–2010, the post-financial crisis 2011–2013 and non-financial crisis 2014–2018. Then, we followed the Markowitz mean-variance model which involved the best possible combination of expected return and risk to construct efficient portfolios in each period. The portfolio which did not contain short sale was achieved by a data solver. We made a choice to choose the optimal portfolio from this efficient set based on rational investors.
Meantime, we also constructed a portfolio with equal weight as a control parameter to determine the best diversification strategy. It was figured out during the period of study; the optimal portfolio was chosen from the efficient frontier formed by Markowitz model perform better than the portfolio with equal weight in all three subperiods. The result reiterates the previous study conducted by [1, 9, 11]. Hence, the Markowitz framework is successful since the variance-covariance and correlation played an important role in determining the optimal portfolio. So, if the Japanese and foreign investors know properly how to apply the Markowitz mean-variance model in their investment. We believe this is the best solution in many alternatives.
But, the limitation of this study is there is no out-of-sample data tested. For future research, a robust optimization approach can be considered with the out-of-sample data tested to construct the optimal portfolio. The portfolio also needs to be rebalanced again to ensure a more accurate result.
I would to express my deepest appreciation to all those who provided me the possibility to complete this research paper. A special gratitude I give to my supervisor Dr. Norizarina binti Ishak and my friend Nur Fathin Shaida Binti Muhammad Nadhirin whose contribution in stimulating suggestions and encouragement, helped me to coordinate my research especially in writing this research paper.
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\\n\\n2. CORRESPONDING AUTHOR'S GRANT OF RIGHTS
\\n\\n2.1 Subject to the following Article, the Corresponding Author grants and shall ensure that each Co-Author grants, to IntechOpen, during the full term of copyright and any extensions or renewals of that term the following:
\\n\\n• An irrevocable, worldwide, royalty-free, perpetual, transferable, sublicensable, non-exclusive right to publish, communicate to the public, reproduce, republish, transmit, sell, distribute and otherwise use and make available the Article in whole, partial or adapted from and/or incorporated in or in conjunction with other works, in electronic and print editions of the Publication and in derivative works and on any platform owned and/or operated by IntechOpen, throughout the world, in all languages, and in all media and formats now known or later developed.
\\n\\n• An irrevocable, worldwide, royalty-free, perpetual, transferable, sublicensable, non-exclusive right to create and store electronic archival copies of the Article, including the right to deposit the Article in open access digital repositories.
\\n\\n• An irrevocable, worldwide, royalty-free, perpetual, transferable, sublicensable, non-exclusive right to license others to reproduce, translate, republish, transmit and distribute the Article in whole, partial or adapted from and/or incorporated in or in conjunction with other works under the condition that the Corresponding Author and each Co-Author is attributed (currently this is carried out by publishing the Article under a Creative Commons 4.0 International Licence).
\\n\\nThe aforementioned licenses shall survive the expiry or termination of this Agreement for any reason.
\\n\\n2.2 The Corresponding Author (on their own behalf and on behalf of any Co-Author) reserves the following rights to the Article but agrees not to exercise them in such a way as to adversely affect IntechOpen's ability to utilize the full benefit of this Publication Agreement: (i) reprographic rights worldwide, other than those which subsist in the typographical arrangement of the Article as published by IntechOpen; and (ii) public lending rights arising under the Public Lending Right Act 1979, as amended from time to time, and any similar rights arising in any part of the world. The Corresponding Author confirms that they (and any Co-Author) are and will remain a member of any applicable licensing and collecting society and any successor to that body responsible for administering royalties for the reprographic reproduction of copyright works.
\\n\\nSubject to the license granted above, copyright in the Article and all versions of it created during IntechOpen's editing process (including the published version) is retained by the Corresponding Author and any Co-Author.
\\n\\nSubject to the license granted above, the Corresponding Author and any Co-Author retains patent, trademark and other intellectual property rights to the Article.
\\n\\n2.3 All rights granted to IntechOpen in this Article are assignable, sublicensable or otherwise transferrable to third parties without the Corresponding Author's or any Co-Author’s specific approval.
\\n\\n2.4 The Corresponding Author (on their own behalf and on behalf of each Co Author) will not assert any rights under the Copyright, Designs and Patents Act 1988 to object to derogatory treatment of the Article as a consequence of IntechOpen's changes to the Article arising from translation of it, corrections and edits for house style, removal of problematic material and other reasonable edits.
\\n\\n3. CORRESPONDING AUTHOR'S DUTIES
\\n\\n3.1 When distributing or re-publishing the Article, the Corresponding Author agrees to credit the Journal in which the Article has been published as the source of first publication, as well as IntechOpen. The Corresponding Author warrants that each Co-Author will also credit the Journal in which the Article has been published as the source of first publication, as well as IntechOpen, when they are distributing or re publishing the Article.
\\n\\n3.2 When submitting the Article, the Corresponding Author agrees to:
\\n\\n• Comply with all instructions and guidelines provided by IntechOpen;
\\n\\n• Produce the Article with all due skill, care and diligence, and in accordance with good scientific practice;
\\n\\n• Submit all the corrections in due time as defined during the publishing process schedule.
\\n\\nThe Corresponding Author will be held responsible for the payment of the Article Processing Charge.
\\n\\nAll payments shall be due 30 days from the date of the issued invoice. The Corresponding Author or the payer on the Corresponding Author's and Co-Authors' behalf will bear all banking and similar charges incurred.
\\n\\n3.3 The Corresponding Author shall obtain in writing all consents necessary for the reproduction of any material in which a third-party right exists, including quotations, photographs and illustrations, in all editions of the Article worldwide for the full term of the above licenses, and shall provide to IntechOpen upon request the original copies of such consents for inspection (at IntechOpen's option) or photocopies of such consents.
\\n\\nThe Corresponding Author shall obtain written informed consent for publication from people who might recognize themselves or be identified by others (e.g. from case reports or photographs).
\\n\\n3.4 The Corresponding Author and any Co-Author shall respect confidentiality rights during and after the termination of this Agreement. The information contained in all correspondence and documents as part of the publishing activity between IntechOpen and the Corresponding Author and any Co-Author are confidential and are intended only for the recipient. The contents may not be disclosed publicly and are not intended for unauthorized use or distribution. Any use, disclosure, copying, or distribution is prohibited and may be unlawful.
\\n\\n4. CORRESPONDING AUTHOR'S WARRANTY
\\n\\n4.1 The Corresponding Author represents and warrants that the Article does not and will not breach any applicable law or the rights of any third party and, specifically, that the Article contains no matter that is defamatory or that infringes any literary or proprietary rights, intellectual property rights, or any rights of privacy. The Corresponding Author warrants and represents that: (i) the Article is the original work of themselves and any Co-Author and is not copied wholly or substantially from any other work or material or any other source; (ii) the Article has not been formally published in any other peer-reviewed journal or in a Journal or edited collection, and is not under consideration for any such publication; (iii) they themselves and any Co-Author are qualifying persons under section 154 of the Copyright, Designs and Patents Act 1988; (iv) they themselves and any Co-Author have not assigned and will not during the term of this Publication Agreement purport to assign any of the rights granted to IntechOpen under this Publication
\\n\\nAgreement; and (v) the rights granted by this Publication Agreement are free from any security interest, option, mortgage, charge or lien.
\\n\\nThe Corresponding Author also warrants and represents that: (i) they have the full power to enter into this Publication Agreement on their own behalf and on behalf of each Co-Author; and (ii) they have the necessary rights and/or title in and to the Article to grant IntechOpen, on behalf of themselves and any Co-Author, the rights and licenses expressed to be granted in this Publication Agreement. If the Article was prepared jointly by the Corresponding Author and any Co-Author, the Corresponding Author warrants and represents that: (i) each Co-Author agrees to the submission, license and publication of the Article on the terms of this Publication Agreement; and (ii) they have the authority to enter into this Publication Agreement on behalf of and bind each Co-Author. The Corresponding Author shall: (i) ensure each Co-Author complies with all relevant provisions of this Publication Agreement, including those relating to confidentiality, performance and standards, as if a party to this Publication Agreement; and (ii) remain primarily liable for all acts and/or omissions of each such Co-Author.
\\n\\nThe Corresponding Author agrees to indemnify and hold IntechOpen harmless against all liabilities, costs, expenses, damages and losses and all reasonable legal costs and expenses suffered or incurred by IntechOpen arising out of or in connection with any breach of the aforementioned representations and warranties. This indemnity shall not cover IntechOpen to the extent that a claim under it results from IntechOpen's negligence or willful misconduct.
\\n\\n4.2 Nothing in this Publication Agreement shall have the effect of excluding or limiting any liability for death or personal injury caused by negligence or any other liability that cannot be excluded or limited by applicable law.
\\n\\n5. TERMINATION
\\n\\n5.1 IntechOpen has a right to terminate this Publication Agreement for quality, program, technical or other reasons with immediate effect, including without limitation (i) if the Corresponding Author or any Co-Author commits a material breach of this Publication Agreement; (ii) if the Corresponding Author or any Co Author (being an individual) is the subject of a bankruptcy petition, application or order; or (iii) if the Corresponding Author or any Co-Author (being a company) commences negotiations with all or any class of its creditors with a view to rescheduling any of its debts, or makes a proposal for or enters into any compromise or arrangement with any of its creditors.
\\n\\nIn case of termination, IntechOpen will notify the Corresponding Author, in writing, of the decision.
\\n\\n6. INTECHOPEN’S DUTIES AND RIGHTS
\\n\\n6.1 Unless prevented from doing so by events outside its reasonable control, IntechOpen, in its discretion, agrees to publish the Article attributing it to the Corresponding Author and any Co-Author.
\\n\\n6.2 IntechOpen has the right to use the Corresponding Author’s and any Co-Author’s names and likeness in connection with scientific dissemination, retrieval, archiving, web hosting and promotion and marketing of the Article and has the right to contact the Corresponding Author and any Co-Author until the Article is publicly available on any platform owned and/or operated by IntechOpen.
\\n\\n6.3 IntechOpen is granted the authority to enforce the rights from this Publication Agreement, on behalf of the Corresponding Author and any Co-Author, against third parties (for example in cases of plagiarism or copyright infringements). In respect of any such infringement or suspected infringement of the copyright in the Article,
\\n\\nIntechOpen shall have absolute discretion in addressing any such infringement which is likely to affect IntechOpen's rights under this Publication Agreement, including issuing and conducting proceedings against the suspected infringer.
\\n\\n7. MISCELLANEOUS
\\n\\n7.1 Further Assurance: The Corresponding Author shall and will ensure that any relevant third party (including any Co-Author) shall, execute and deliver whatever further documents or deeds and perform such acts as IntechOpen reasonably requires from time to time for the purpose of giving IntechOpen the full benefit of the provisions of this Publication Agreement.
\\n\\n7.2 Third Party Rights: A person who is not a party to this Publication Agreement may not enforce any of its provisions under the Contracts (Rights of Third Parties) Act 1999.
\\n\\n7.3 Entire Agreement: This Publication Agreement constitutes the entire agreement between the parties in relation to its subject matter. It replaces and extinguishes all prior agreements, draft agreements, arrangements, collateral warranties, collateral contracts, statements, assurances, representations and undertakings of any nature made by or on behalf of the parties, whether oral or written, in relation to that subject matter. Each party acknowledges that in entering into this Publication Agreement it has not relied upon any oral or written statements, collateral or other warranties, assurances, representations or undertakings which were made by or on behalf of the other party in relation to the subject matter of this Publication Agreement at any time before its signature (together "Pre-Contractual Statements"), other than those which are set out in this Publication Agreement. Each party hereby waives all rights and remedies which might otherwise be available to it in relation to such Pre-Contractual Statements. Nothing in this clause shall exclude or restrict the liability of either party arising out of its pre-contract fraudulent misrepresentation or fraudulent concealment.
\\n\\n7.4 Waiver: No failure or delay by a party to exercise any right or remedy provided under this Publication Agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall preclude or restrict the further exercise of that or any other right or remedy.
\\n\\n7.5 Variation: No variation of this Publication Agreement shall be effective unless it is in writing and signed by the parties (or their duly authorized representatives).
\\n\\n7.6 Severance: If any provision or part-provision of this Publication Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted.
\\n\\nAny modification to or deletion of a provision or part-provision under this clause shall not affect the validity and enforceability of the rest of this Publication Agreement.
\\n\\n7.7 No partnership: Nothing in this Publication Agreement is intended to, or shall be deemed to, establish or create any partnership or joint venture or the relationship of principal and agent or employer and employee between IntechOpen and the Corresponding Author or any Co-Author, nor authorize any party to make or enter into any commitments for or on behalf of any other party.
\\n\\n7.8 Governing law: This Publication Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales. The parties submit to the exclusive jurisdiction of the English courts to settle any dispute or claim arising out of or in connection with this Publication Agreement (including any non-contractual disputes or claims).
\\n"}]'},components:[{type:"htmlEditorComponent",content:"The Corresponding Author (acting on behalf of all Authors) and INTECHOPEN LIMITED, incorporated and registered in England and Wales with company number 11086078 and a registered office at 5 Princes Gate Court, London, United Kingdom, SW7 2QJ conclude the following Agreement regarding the publication of a Journal Article:
\n\n1. DEFINITIONS
\n\nCorresponding Author: The Author of the Article who serves as a Signatory to this Agreement. The Corresponding Author acts on behalf of any other Co-Author. Co-Author: All other Authors of the Article besides the Corresponding Author. IntechOpen: IntechOpen Ltd., the Publisher of the Journal.
\n\nJournal: The publication as a collection of Articles compiled by IntechOpen .
\n\nArticle: The original literary work created by Corresponding Author and any Co Author that is the subject of this Agreement.
\n\n2. CORRESPONDING AUTHOR'S GRANT OF RIGHTS
\n\n2.1 Subject to the following Article, the Corresponding Author grants and shall ensure that each Co-Author grants, to IntechOpen, during the full term of copyright and any extensions or renewals of that term the following:
\n\n• An irrevocable, worldwide, royalty-free, perpetual, transferable, sublicensable, non-exclusive right to publish, communicate to the public, reproduce, republish, transmit, sell, distribute and otherwise use and make available the Article in whole, partial or adapted from and/or incorporated in or in conjunction with other works, in electronic and print editions of the Publication and in derivative works and on any platform owned and/or operated by IntechOpen, throughout the world, in all languages, and in all media and formats now known or later developed.
\n\n• An irrevocable, worldwide, royalty-free, perpetual, transferable, sublicensable, non-exclusive right to create and store electronic archival copies of the Article, including the right to deposit the Article in open access digital repositories.
\n\n• An irrevocable, worldwide, royalty-free, perpetual, transferable, sublicensable, non-exclusive right to license others to reproduce, translate, republish, transmit and distribute the Article in whole, partial or adapted from and/or incorporated in or in conjunction with other works under the condition that the Corresponding Author and each Co-Author is attributed (currently this is carried out by publishing the Article under a Creative Commons 4.0 International Licence).
\n\nThe aforementioned licenses shall survive the expiry or termination of this Agreement for any reason.
\n\n2.2 The Corresponding Author (on their own behalf and on behalf of any Co-Author) reserves the following rights to the Article but agrees not to exercise them in such a way as to adversely affect IntechOpen's ability to utilize the full benefit of this Publication Agreement: (i) reprographic rights worldwide, other than those which subsist in the typographical arrangement of the Article as published by IntechOpen; and (ii) public lending rights arising under the Public Lending Right Act 1979, as amended from time to time, and any similar rights arising in any part of the world. The Corresponding Author confirms that they (and any Co-Author) are and will remain a member of any applicable licensing and collecting society and any successor to that body responsible for administering royalties for the reprographic reproduction of copyright works.
\n\nSubject to the license granted above, copyright in the Article and all versions of it created during IntechOpen's editing process (including the published version) is retained by the Corresponding Author and any Co-Author.
\n\nSubject to the license granted above, the Corresponding Author and any Co-Author retains patent, trademark and other intellectual property rights to the Article.
\n\n2.3 All rights granted to IntechOpen in this Article are assignable, sublicensable or otherwise transferrable to third parties without the Corresponding Author's or any Co-Author’s specific approval.
\n\n2.4 The Corresponding Author (on their own behalf and on behalf of each Co Author) will not assert any rights under the Copyright, Designs and Patents Act 1988 to object to derogatory treatment of the Article as a consequence of IntechOpen's changes to the Article arising from translation of it, corrections and edits for house style, removal of problematic material and other reasonable edits.
\n\n3. CORRESPONDING AUTHOR'S DUTIES
\n\n3.1 When distributing or re-publishing the Article, the Corresponding Author agrees to credit the Journal in which the Article has been published as the source of first publication, as well as IntechOpen. The Corresponding Author warrants that each Co-Author will also credit the Journal in which the Article has been published as the source of first publication, as well as IntechOpen, when they are distributing or re publishing the Article.
\n\n3.2 When submitting the Article, the Corresponding Author agrees to:
\n\n• Comply with all instructions and guidelines provided by IntechOpen;
\n\n• Produce the Article with all due skill, care and diligence, and in accordance with good scientific practice;
\n\n• Submit all the corrections in due time as defined during the publishing process schedule.
\n\nThe Corresponding Author will be held responsible for the payment of the Article Processing Charge.
\n\nAll payments shall be due 30 days from the date of the issued invoice. The Corresponding Author or the payer on the Corresponding Author's and Co-Authors' behalf will bear all banking and similar charges incurred.
\n\n3.3 The Corresponding Author shall obtain in writing all consents necessary for the reproduction of any material in which a third-party right exists, including quotations, photographs and illustrations, in all editions of the Article worldwide for the full term of the above licenses, and shall provide to IntechOpen upon request the original copies of such consents for inspection (at IntechOpen's option) or photocopies of such consents.
\n\nThe Corresponding Author shall obtain written informed consent for publication from people who might recognize themselves or be identified by others (e.g. from case reports or photographs).
\n\n3.4 The Corresponding Author and any Co-Author shall respect confidentiality rights during and after the termination of this Agreement. The information contained in all correspondence and documents as part of the publishing activity between IntechOpen and the Corresponding Author and any Co-Author are confidential and are intended only for the recipient. The contents may not be disclosed publicly and are not intended for unauthorized use or distribution. Any use, disclosure, copying, or distribution is prohibited and may be unlawful.
\n\n4. CORRESPONDING AUTHOR'S WARRANTY
\n\n4.1 The Corresponding Author represents and warrants that the Article does not and will not breach any applicable law or the rights of any third party and, specifically, that the Article contains no matter that is defamatory or that infringes any literary or proprietary rights, intellectual property rights, or any rights of privacy. The Corresponding Author warrants and represents that: (i) the Article is the original work of themselves and any Co-Author and is not copied wholly or substantially from any other work or material or any other source; (ii) the Article has not been formally published in any other peer-reviewed journal or in a Journal or edited collection, and is not under consideration for any such publication; (iii) they themselves and any Co-Author are qualifying persons under section 154 of the Copyright, Designs and Patents Act 1988; (iv) they themselves and any Co-Author have not assigned and will not during the term of this Publication Agreement purport to assign any of the rights granted to IntechOpen under this Publication
\n\nAgreement; and (v) the rights granted by this Publication Agreement are free from any security interest, option, mortgage, charge or lien.
\n\nThe Corresponding Author also warrants and represents that: (i) they have the full power to enter into this Publication Agreement on their own behalf and on behalf of each Co-Author; and (ii) they have the necessary rights and/or title in and to the Article to grant IntechOpen, on behalf of themselves and any Co-Author, the rights and licenses expressed to be granted in this Publication Agreement. If the Article was prepared jointly by the Corresponding Author and any Co-Author, the Corresponding Author warrants and represents that: (i) each Co-Author agrees to the submission, license and publication of the Article on the terms of this Publication Agreement; and (ii) they have the authority to enter into this Publication Agreement on behalf of and bind each Co-Author. The Corresponding Author shall: (i) ensure each Co-Author complies with all relevant provisions of this Publication Agreement, including those relating to confidentiality, performance and standards, as if a party to this Publication Agreement; and (ii) remain primarily liable for all acts and/or omissions of each such Co-Author.
\n\nThe Corresponding Author agrees to indemnify and hold IntechOpen harmless against all liabilities, costs, expenses, damages and losses and all reasonable legal costs and expenses suffered or incurred by IntechOpen arising out of or in connection with any breach of the aforementioned representations and warranties. This indemnity shall not cover IntechOpen to the extent that a claim under it results from IntechOpen's negligence or willful misconduct.
\n\n4.2 Nothing in this Publication Agreement shall have the effect of excluding or limiting any liability for death or personal injury caused by negligence or any other liability that cannot be excluded or limited by applicable law.
\n\n5. TERMINATION
\n\n5.1 IntechOpen has a right to terminate this Publication Agreement for quality, program, technical or other reasons with immediate effect, including without limitation (i) if the Corresponding Author or any Co-Author commits a material breach of this Publication Agreement; (ii) if the Corresponding Author or any Co Author (being an individual) is the subject of a bankruptcy petition, application or order; or (iii) if the Corresponding Author or any Co-Author (being a company) commences negotiations with all or any class of its creditors with a view to rescheduling any of its debts, or makes a proposal for or enters into any compromise or arrangement with any of its creditors.
\n\nIn case of termination, IntechOpen will notify the Corresponding Author, in writing, of the decision.
\n\n6. INTECHOPEN’S DUTIES AND RIGHTS
\n\n6.1 Unless prevented from doing so by events outside its reasonable control, IntechOpen, in its discretion, agrees to publish the Article attributing it to the Corresponding Author and any Co-Author.
\n\n6.2 IntechOpen has the right to use the Corresponding Author’s and any Co-Author’s names and likeness in connection with scientific dissemination, retrieval, archiving, web hosting and promotion and marketing of the Article and has the right to contact the Corresponding Author and any Co-Author until the Article is publicly available on any platform owned and/or operated by IntechOpen.
\n\n6.3 IntechOpen is granted the authority to enforce the rights from this Publication Agreement, on behalf of the Corresponding Author and any Co-Author, against third parties (for example in cases of plagiarism or copyright infringements). In respect of any such infringement or suspected infringement of the copyright in the Article,
\n\nIntechOpen shall have absolute discretion in addressing any such infringement which is likely to affect IntechOpen's rights under this Publication Agreement, including issuing and conducting proceedings against the suspected infringer.
\n\n7. MISCELLANEOUS
\n\n7.1 Further Assurance: The Corresponding Author shall and will ensure that any relevant third party (including any Co-Author) shall, execute and deliver whatever further documents or deeds and perform such acts as IntechOpen reasonably requires from time to time for the purpose of giving IntechOpen the full benefit of the provisions of this Publication Agreement.
\n\n7.2 Third Party Rights: A person who is not a party to this Publication Agreement may not enforce any of its provisions under the Contracts (Rights of Third Parties) Act 1999.
\n\n7.3 Entire Agreement: This Publication Agreement constitutes the entire agreement between the parties in relation to its subject matter. It replaces and extinguishes all prior agreements, draft agreements, arrangements, collateral warranties, collateral contracts, statements, assurances, representations and undertakings of any nature made by or on behalf of the parties, whether oral or written, in relation to that subject matter. Each party acknowledges that in entering into this Publication Agreement it has not relied upon any oral or written statements, collateral or other warranties, assurances, representations or undertakings which were made by or on behalf of the other party in relation to the subject matter of this Publication Agreement at any time before its signature (together "Pre-Contractual Statements"), other than those which are set out in this Publication Agreement. Each party hereby waives all rights and remedies which might otherwise be available to it in relation to such Pre-Contractual Statements. Nothing in this clause shall exclude or restrict the liability of either party arising out of its pre-contract fraudulent misrepresentation or fraudulent concealment.
\n\n7.4 Waiver: No failure or delay by a party to exercise any right or remedy provided under this Publication Agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall preclude or restrict the further exercise of that or any other right or remedy.
\n\n7.5 Variation: No variation of this Publication Agreement shall be effective unless it is in writing and signed by the parties (or their duly authorized representatives).
\n\n7.6 Severance: If any provision or part-provision of this Publication Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted.
\n\nAny modification to or deletion of a provision or part-provision under this clause shall not affect the validity and enforceability of the rest of this Publication Agreement.
\n\n7.7 No partnership: Nothing in this Publication Agreement is intended to, or shall be deemed to, establish or create any partnership or joint venture or the relationship of principal and agent or employer and employee between IntechOpen and the Corresponding Author or any Co-Author, nor authorize any party to make or enter into any commitments for or on behalf of any other party.
\n\n7.8 Governing law: This Publication Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales. The parties submit to the exclusive jurisdiction of the English courts to settle any dispute or claim arising out of or in connection with this Publication Agreement (including any non-contractual disputes or claims).
\n"}]},successStories:{items:[]},authorsAndEditors:{filterParams:{},profiles:[{id:"396",title:"Dr.",name:"Vedran",middleName:null,surname:"Kordic",slug:"vedran-kordic",fullName:"Vedran Kordic",position:null,profilePictureURL:"https://mts.intechopen.com/storage/users/396/images/7281_n.png",biography:"After obtaining his Master's degree in Mechanical Engineering he continued his education at the Vienna University of Technology where he obtained his PhD degree in 2004. He worked as a researcher at the Automation and Control Institute, Faculty of Electrical Engineering, Vienna University of Technology until 2008. His studies in robotics lead him not only to a PhD degree but also inspired him to co-found and build the International Journal of Advanced Robotic Systems - world's first Open Access journal in the field of robotics.",institutionString:null,institution:{name:"TU Wien",country:{name:"Austria"}}},{id:"441",title:"Ph.D.",name:"Jaekyu",middleName:null,surname:"Park",slug:"jaekyu-park",fullName:"Jaekyu Park",position:null,profilePictureURL:"https://mts.intechopen.com/storage/users/441/images/1881_n.jpg",biography:null,institutionString:null,institution:{name:"LG Corporation (South Korea)",country:{name:"Korea, South"}}},{id:"465",title:"Dr",name:"Christian",middleName:null,surname:"Martens",slug:"christian-martens",fullName:"Christian Martens",position:null,profilePictureURL:"//cdnintech.com/web/frontend/www/assets/author.svg",biography:null,institutionString:null,institution:null},{id:"479",title:"Dr.",name:"Valentina",middleName:null,surname:"Colla",slug:"valentina-colla",fullName:"Valentina Colla",position:null,profilePictureURL:"https://mts.intechopen.com/storage/users/479/images/358_n.jpg",biography:null,institutionString:null,institution:{name:"Sant'Anna School of Advanced Studies",country:{name:"Italy"}}},{id:"494",title:"PhD",name:"Loris",middleName:null,surname:"Nanni",slug:"loris-nanni",fullName:"Loris Nanni",position:null,profilePictureURL:"https://mts.intechopen.com/storage/users/494/images/system/494.jpg",biography:"Loris Nanni received his Master Degree cum laude on June-2002 from the University of Bologna, and the April 26th 2006 he received his Ph.D. in Computer Engineering at DEIS, University of Bologna. On September, 29th 2006 he has won a post PhD fellowship from the university of Bologna (from October 2006 to October 2008), at the competitive examination he was ranked first in the industrial engineering area. He extensively served as referee for several international journals. He is author/coauthor of more than 100 research papers. He has been involved in some projects supported by MURST and European Community. His research interests include pattern recognition, bioinformatics, and biometric systems (fingerprint classification and recognition, signature verification, face recognition).",institutionString:null,institution:null},{id:"496",title:"Dr.",name:"Carlos",middleName:null,surname:"Leon",slug:"carlos-leon",fullName:"Carlos Leon",position:null,profilePictureURL:"//cdnintech.com/web/frontend/www/assets/author.svg",biography:null,institutionString:null,institution:{name:"University of Seville",country:{name:"Spain"}}},{id:"512",title:"Dr.",name:"Dayang",middleName:null,surname:"Jawawi",slug:"dayang-jawawi",fullName:"Dayang Jawawi",position:null,profilePictureURL:"//cdnintech.com/web/frontend/www/assets/author.svg",biography:null,institutionString:null,institution:{name:"University of Technology Malaysia",country:{name:"Malaysia"}}},{id:"528",title:"Dr.",name:"Kresimir",middleName:null,surname:"Delac",slug:"kresimir-delac",fullName:"Kresimir Delac",position:null,profilePictureURL:"https://mts.intechopen.com/storage/users/528/images/system/528.jpg",biography:"K. 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Dr. Blumenberg’s research is focused on the epidermis, expression of keratin genes, transcription profiling, keratinocyte differentiation, inflammatory diseases and cancers, and most recently the effects of the microbiome on the skin. 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Behind these definitions are hidden all the aspects of normal and pathological functioning of all processes that the topic ‘Metabolism’ will cover within the Biochemistry Series. 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Thus proteomics, an area of research that detects all protein forms expressed in an organism, including splice isoforms and post-translational modifications, is more suitable than genomics for a comprehensive understanding of the biochemical processes that govern life. The most common proteomics applications are currently in the clinical field for the identification, in a variety of biological matrices, of biomarkers for diagnosis and therapeutic intervention of disorders. From the comparison of proteomic profiles of control and disease or different physiological states, which may emerge, changes in protein expression can provide new insights into the roles played by some proteins in human pathologies. Understanding how proteins function and interact with each other is another goal of proteomics that makes this approach even more intriguing. Specialized technology and expertise are required to assess the proteome of any biological sample. Currently, proteomics relies mainly on mass spectrometry (MS) combined with electrophoretic (1 or 2-DE-MS) and/or chromatographic techniques (LC-MS/MS). MS is an excellent tool that has gained popularity in proteomics because of its ability to gather a complex body of information such as cataloging protein expression, identifying protein modification sites, and defining protein interactions. 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