Alternative Beta Strategies in Commodities
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Harry Markowitz’s 1952, modern portfolio theory has been the cornerstones of asset allocation and portfolio construction. In reality, the correlation between traditional asset classes has increased steadily over the past decade. Seemingly unrelated assets moved in lockstep, and portfolios once thought to be diversified did not weather the storm.This has led to some investors exploring alternative beta strategies as an alternative to conventional market portfolios. Alternative beta strategies area two-fold. One approach is the “risk-based approach” and the other is the “factor-based” approach.These strategies have become part of equity #investing and the popularity of these strategies originate from both a desire for diversification and the awareness that systematic risk factors explain the (...)
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