Enhancing Portfolio Rebalancing Efficiency Using Binomial Distribution: A Case Study of Beating the Nifty Index with good CAGR

This paper explores the application of the Binomial Distribution Theorem in optimizing portfolio rebalancing strategies to outperform the Nifty Index. A model based on the Binomial distribution is proposed for identifying entry and exit points in stocks, aiming for a 30\% Compound Annual Growth Rate (CAGR). Our empirical analysis demonstrates that by systematically applying this technique, portfolio managers can significantly enhance returns while maintaining risk levels comparable to the benchmark index. This method shows potential for outperforming traditional rebalancing strategies. Extensions of this theorem, including Monte Carlo simulations and Black-Scholes adjustments, are incorporated to further refine the model and enhance its effectiveness.