Art as a diversification tool of investment portfolios

Abstract

The paper constitutes an argumentation of art investments as portfolio diversification tool, presents the analysis of the specifics and conception of investments in art. Moreover, it represents the structure of art market participants. Analysis of the statistical data reveals that the biggest art markets having long traditions of investing in art yield ground to emergent Eastern markets. The main objective of this paper is to investigate art as an investment tool for diversification of investment portfolio. In order to assess whether the investments in art can be used to diversify investment portfolio correlation regression analysis was made. For calculatin of optimal portfolios and finding efficient frontiers teaching material of C. W. Holden from Indiana University “Excel Modelling and Estimation in Investments” was used. The comparison of return and risk of the portfolios comprised with art investment are presented in the article.