Market Research – Power of Diversifying with Digital Assets – Download PDF
Adding Digital Assets/Cryptocurrencies to your portfolio can be an effective way to diversify and create higher risk adjusted returns. Digital Assets are non-correlated with traditional markets and can actually improve the risk profile of your portfolio. Below is a GCG Market Research study of 4 different portfolios with an inception date of January 1st, 2015 and an end date of May 31st, 2018.
Every portfolio that had Digital Asset exposure outperformed the portfolio with no Digital Asset exposure, the “Traditional” portfolio. By adding a Digital Asset allocation, all three portfolios increased their average return and reduced their US Market Correlation.
More importantly, all three portfolios were able to reduce their maximum drawdowns. Given Digital Assets are non-correlated with traditional investments, they may act as a hedge for your portfolio.
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