퀀트 스터디노트

【Asset Allocation】Diversification

Recap In our first post, we stressed the importance of: 1. Minimizing Loss ($) 2. Minimizing Frequency of Loss 3. Minimizing Volatility To cut to the point, there are three main approaches to achieving these goals: 1. Diversification 2. Asset Allocation 3. Trend Following Strategy 1. Diversification Two Stock Porfolio Let's say, you, investor is only given two options: APPLE stock and cash. APPL..

Study Note/Portfolio Management 2020. 7. 17. 07:29

【Asset Allocation】Gain-Loss Asymmetry

Gain-Loss Asymmetry Simple arithematic poses two consecutive days with 50% gain and 50% loss, respectively to even out. However, investing runs on a compounding basis. This simple but crucial aspect more often than not exposes investors to so-called "Gain-Loss Asymmetry". This is to say, the percentage gain required to even out the loss is much larger than the percent lost." Proposition 1 Invest..

Study Note/Portfolio Management 2020. 7. 15. 17:11