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Uncorrelated Investing Is Ultimate Risk Reduction for Investors

Updated: Mar 17

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.



If you do not have a work email address, please email us at info@primealpha.com and we can email you the report directly.



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




Thanks to our Contributor


WPT Funds Management

alpha@wptfunds.com


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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