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This article (the “Article”) is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any investment or any securities. This Article does not constitute investment advice and is not intended to be relied upon as the basis for an investment decision, and is not, and should not be assumed to be, complete. Readers should make their own investigations and evaluations of the information contained herein. The information contained herein does not take into account the particular investment objectives or financial circumstances of any specific person or entity who may receive it. Each reader should consult its own attorney, business adviser and tax adviser as to legal, business, tax and related matters concerning the information contained herein.  Except where otherwise indicated herein, the information provided herein is based on matters as they exist as of the date of preparation and not as of any future date and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date of preparation. Certain information contained in this Article constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,”  “target,” “project,” “estimate,” “intend,” “continue” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. Readers should not rely on these forward-looking statements.  Certain information reflects subjective determinations which may prove to be incorrect. There can be no assurance that the estimates or projections will be accurate or that historical trends will continue. In considering the prior performance information contained herein, readers should bear in mind past performance is not necessarily indicative of future results. All rights reserved. The material may not be reproduced or distributed, in whole or in part, without the prior written permission of PrimeAlpha LLC.

Uncorrelated Investing Is Ultimate Risk Reduction for Investors

Uncorrelated Investing Is Ultimate Risk Reduction for Investors

Low-statistical-dependence risk premia are essential yet often underestimated tools in managing investment risks and enhancing returns.

While the mathematical principles behind volatility and correlation are well-understood, their practical impact on portfolio performance is not always fully appreciated by investors. Greater recognition and application of these statistical features could lead to improved investment strategies, optimizing both risk management and return potentials.

The paper advocates for portfolios built on low-correlated, independent risk premia, suggesting this approach could substantially improve investment outcomes compared to traditional diversification techniques.

Access the full report for an in-depth exploration of low-statistical-dependence risk premia and their significant impact on investment strategies. Discover how understanding and applying these concepts can dramatically improve the management of investment risks and enhance returns. This comprehensive analysis not only critiques current pension fund strategies but also offers insights into achieving true diversification through independent risk premia.

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Table of Contents

  • The Value of Low-Statistical-Dependence Risk Premia Building Blocks

  • Example Pension Fund Allocation

  • Portfolio Return Analysis

  • The Efficient Frontier

  • The Moral of the Story

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WPT Funds Management

WPT Funds Management is focused on understanding how the world works. By having the deepest possible understanding of the global economy and financial markets and then translating that understanding into a great portfolio and strategic partnerships. We are building a distinct track record of success. We aim to do this by having great people operate in a culture of radical truth and radical transparency.


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