Firms such as Bridgewater Associates pioneered the concept of "risk parity", allocating assets in a way that balances their risk contribution to the overall portfolio risk. Underpinning this strategy is the assumption that higher volatility in an asset should result in a lower weight and vice versa. However, out side of equities the relationship between volatility and return is not nearly as clear-cut. Acknowledging a variable relationship between the two for other assets has the potential not only to improve risk-adjusted returns, but lead to more diversity from the herd in managing portfolio changes in the future

---

The information provided herein is for information purposes only and is not intended to be and does not constitute financial, investment, tax or legal advice. All investments are subject to risks, including the risk of loss of principal. Past performance is not an indicator of future results.

The information and opinions contained in Salt’s blog posts, market commentaries and other writings are of a general nature and are provided solely for the use of Salt. This content is not to be reproduced, copied or made available to others without the expressed written consent of Salt. These materials reflect the opinion of Salt on the date of production and are subject to change at any time without notice. Due to various factors, including changing market conditions or tax laws, the content may no longer be reflective of current opinions or positions.

The information contained herein is not intended as a recommendation to buy, hold or sell any security. The investment performance described herein is simulated and does not reflect actual performance data. Actual investment performance may vary. There is no guarantee that an investment will be profitable and all investments bear the risk of partial or complete loss of capital. Past performance is not an indicator of future results.

Any market observations and data provided are for informational purposes only. Where data is presented that is prepared by third parties, such information will be cited, and these sources have been deemed to be reliable. However, Salt does not warrant the accuracy of this information. Salt and any third parties listed, cited or otherwise identified herein are separate and unaffiliated and are not responsible for each other’s policies, products or services.

First Name*

Last Name*

Email*

 |