  Accurate prediction of future prices of stocks is a difficult task to
perform. Even more challenging is to design an optimized portfolio with weights
allocated to the stocks in a way that optimizes its return and the risk. This
paper presents a systematic approach towards building two types of portfolios,
optimum risk, and eigen, for four critical economic sectors of India. The
prices of the stocks are extracted from the web from Jan 1, 2016, to Dec 31,
2020. Sector-wise portfolios are built based on their ten most significant
stocks. An LSTM model is also designed for predicting future stock prices. Six
months after the construction of the portfolios, i.e., on Jul 1, 2021, the
actual returns and the LSTM-predicted returns for the portfolios are computed.
A comparison of the predicted and the actual returns indicate a high accuracy
level of the LSTM model.
