Hello all,
There is an old and often cited Latin adage, “Si vis pacem, para bellum” which we can loosely translate as “If you want peace, prepare for war“. While this term comes from military and politics, we can see its wisdom in portfolio management – if we want to profit as traders/investors in the long term, we must know how to manage risks during long bear markets and short-term crises.
Currently, the stocks indexes around the world are close to all-time highs, and an optimistic mood is in the air. Corona crisis is nearly forgotten (at least financial markets act as if nothing had happened), but there will be a crisis at some time in the future. And it’s better to prepare for the worst during calm periods than to look for quick help under stress in volatile times. Therefore, we have prepared a new report for our Quantpedia Pro clients, which allows you to pick any asset, trading strategy or a mix of assets/factors into your model portfolio and find a trading strategy that works as a Crisis Hedge during negative months or bear markets. How does it work?
We split this report into two sections – negative months hedges and bear markets hedges:
The first section helps you to identify periods when your model portfolio experienced negative monthly performance, shows performance distribution during these periods and then suggests 5 trading strategies with the lowest downside correlation that can act as a short-term Crisis Hedge.
The second section helps you to identify periods when your model portfolio experienced bear markets, defined as periods during which the equity curve is under the 12-month moving average. The report then shows performance distribution and suggests 5 trading strategies with the lowest downside correlation that can act as a Crisis Hedge in bear markets.
So don’t get caught up, but build any model portfolio – equity-centric, heavy on commodities or bonds, tilted to cryptocurrencies, or upload your own equity curves. And then, you can quickly analyze your downside risks and look for possible Crisis Hedge solutions.
Quantpedia Pro reporting is not the only service that we are working on. So now, let’s also quickly recapitulate Quantpedia Premium development:
We have also significantly increased publication tempo on the Quantpedia blog, as 12 new articles were written in the previous month. Here are the six published in the last two weeks:
Factor Exposures of Thematic Indices
Authors: David Blitz
Title: Betting Against Quant: Examining the Factor Exposures of Thematic Indices
The Best Systematic Trading Strategies in 2021: Part 3
Authors: Radovan Vojtko
Title: The Best Systematic Trading Strategies in 2021: Part 3
How to Use Exotic Assets to Improve Your Trading Strategy
Authors: Dominik Cisar
Title: How to Use Exotic Assets to Improve Your Trading Strategy
Impact of US Inflation on Global Asset Returns
Author: Wei Dai and Mamdouh Medhat
Title: US Inflation and Global Asset Returns
The Best Systematic Trading Strategies in 2021: Part 2
Author: Radovan Vojtko
Title: The Best Systematic Trading Strategies in 2021: Part 2
Modelling the Impact of Climate Change and Policies on GDP
Author: Claire Alestra, Gilbert Cette, Valérie Chouard and Remy Lecat
Title: Long-term Growth Impact of Climate Change and Policies
Stay safe …
Radovan Vojtko
CEO & Head of Research
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