Cryptocurrencies like Bitcoin belong in every portfolio. But what about their risk-return profile and how high is the correlation to traditional assets?One of the fundamentals of portfolio theory is diversification, through which the risk \u2014 measured by the standard deviation \u2014 is to be minimized without reducing the expected return. Because every single asset class has its own risk-return profile, as can be seen in the graphic below.The optimal investment would be located at the top left, i.e. a high expected return with a low standard deviation. Normally, a riskier investment also delivers a higher expected return.Correlations are measured with the so-called correlation coefficient, which can be between +1 (perfectly positive) and -1 (perfectly negative). In terms of risk diversification, both values \u200b\u200bare not desirable, as either the entire portfolio rises or falls with one event or half of the portfolio rises while the other half falls. Diversification is achieved above all by adding an asset that, ideally, does not show any correlation with other asset classes. The lower the correlation between the assets of a portfolio, the more risk that can be eliminated. A non-correlating asset is considered the holy grail of portfolio construction.In the context of this article, the strategic asset allocation is assumed, not the tactical asset allocation. So it\u2019s about a long-term breakdown into different asset classes and not about short-term earnings opportunities in certain industries or which asset manager is selected.First, let\u2019s take a look at traditional asset classes such as stocks, bonds, commodities and real estate.As can be seen in the top left quadrant, stocks correlate very positively with one another worldwide, so they are only suitable for risk diversification to a certain extent. Gold is very suitable for adding to an equity portfolio, but correlates relatively strongly with other commodities and real estate.\u2026<\/p>","protected":false},"excerpt":{"rendered":"
Criptomoedas como Bitcoin pertencem a todos os portf\u00f3lios. Mas e quanto ao seu perfil de risco-retorno e qu\u00e3o alta \u00e9 a correla\u00e7\u00e3o com os ativos tradicionais? Um dos fundamentos da [\u2026]<\/span><\/p>","protected":false},"author":0,"featured_media":2660,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/afluxcoin.com\/pt\/wp-json\/wp\/v2\/posts\/2659"}],"collection":[{"href":"https:\/\/afluxcoin.com\/pt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/afluxcoin.com\/pt\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/pt\/wp-json\/wp\/v2\/comments?post=2659"}],"version-history":[{"count":0,"href":"https:\/\/afluxcoin.com\/pt\/wp-json\/wp\/v2\/posts\/2659\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/pt\/wp-json\/wp\/v2\/media\/2660"}],"wp:attachment":[{"href":"https:\/\/afluxcoin.com\/pt\/wp-json\/wp\/v2\/media?parent=2659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/afluxcoin.com\/pt\/wp-json\/wp\/v2\/categories?post=2659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/afluxcoin.com\/pt\/wp-json\/wp\/v2\/tags?post=2659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}