43) Correlation Heatmaps for Trading Strategies | Reducing Portfolio Risk

Описание: Using Trading Strategy Heatmaps: It can increase your portfolio risk if you build and trade multiple algorithmic, systematic or discretionary trading strategies that are too correlated. Trading a Mean-Reversion strategy with an uncorrelated Trend-Following strategy can be beneficial because the results should be a smoothed-out equity curve. However, attempt to trade two trend-following strategies together or two mean-reversion strategies together, and the high levels of correlation could have the effect of almost doubling your drawdown, meaning the approach is counterproductive. A correlation heatmap will greatly assist you in making appropriate decisions when combining the individual components of your portfolio.

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Content Disclaimer: Past performance is not a reliable indicator of future results. The contents of this video (and all other videos by the presenter) are for educational purposes only and are not to be construed as financial and/or investment advice.

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