The selection criteria play an important role in the portfolio optimization
using any ratio model. In this paper, the authors have considered the mean return as
profit and variance of return as risk on the asset return as selection criteria, as the first
stage to optimize the selected portfolio. Furthermore, the sharp ratio (SR) has been
considered to be the optimization ratio model. In this regard, the historical data taken
from Shanghai Stock Exchange (SSE) has been considered. A metaheuristic technique
has been developed, with financial tool box available in MATLAB and the particle swarm
optimization (PSO) algorithm. Hence, called as the hybrid particle swarm optimization
(HPSO) or can also be called as financial tool box particle swarm optimization (FTBPSO).
In this model, the budgets as constraint, where as two different models i.e. with
and without short sale, have been considered. The obtained results have been compared
with the existing literature and the proposed technique is found to be optimum and better
in terms of profit.