top of page
Search

Diversifying Pays Off

In our recent webinar I spoke briefly about the advantages of diversifying between our two strategies; JC05 and JC07. These comments could not have come at a better time, as JC07 is currently treading water, our other strategy (JC05) has made a sizeable return of about 11% so far for September. This mean for those who have decided to trade both strategies have still made a nice return for the month.


Why Diversify? - Diversifying between the two strategies give the investor a smoother return – this means smaller overall drawdown and more consistent monthly return. The proof in this is the Standard Deviation of monthly returns. Standard Deviation is a quantity expressing by how much the monthly returns differ from the mean value for the group. In figure1, you will see the difference in each strategy verse it’s effect as a combination (monthly cumulative chart 09/2014 to 09/2016) (right).


JC07 has a standard deviation of 9.37 and JC05 has a standard deviation of 4.60 where the measure for the combined strategies is 6.64. This implies the investor would make a greater return (in dollars) with less risk than if trading JC07 alone. Take note of the drawdown of both JC07 and JC05 compared to the combined amount in figure2 (left).



 
 
 

Комментарии


© 2013, Inc. All Rights Reserved

Contact

MELBOURNE

Suite 2, Level 2,

349 Collins Street,

MELBOURNE VIC 3000

 

Tel: +61 0489 081 500

Email: team@lepusproprietarytrading.com.au

General Advice & Risk Disclaimer, Trading Risk Warning:

The information provided on this website is of a general nature only and does not take into account your objectives, financial situation, or needs. Before making any financial decision, you should consider whether the information is appropriate for your circumstances and seek independent professional advice if necessary. We do not provide personal financial advice or recommendations tailored to individual situations. Any financial products or services mentioned are for informational purposes only and do not constitute an offer, solicitation, or recommendation to buy or sell.


Trading foreign exchange and futures on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange or futures, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment, and therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange and futures trading and seek advice from an independent financial adviser if you have any doubts.

Past performance of financial products is not an assurance of future performance.

Lepus Proprietary Trading is a trading name of Wolverton Investment Group Pty Ltd (ACN: 639 257 613) (Corporate Authorised Representative No. 1314535 of Australian Financial Services License 460940)

  • White Twitter Icon
  • White LinkedIn Icon
  • White Facebook Icon
bottom of page