Crypto’s low correlations with other asset classes mean portfolio managers should at least consider it for diversification in 2022 – provided they can stomach the volatility, lvlewitinn writes.
With 2021 just about in the rearview mirror, it’s a good time to reassess the notion that cryptocurrency is still a risk-on asset class. After all, crypto’s risk will help determine how to allocate assets in 2022.
The black line shows the correlation between bitcoin and the S&P 500, the index that represents the U.S. stock market. If equities are generally a risk-on bet , then one would assume bitcoin would be highly correlated to the index or at least move in that direction. No dice there, either. The 90-day correlation between bitcoin and gold saw its 2021 peak in early January, also at 0.30. It has since been flopping around the 0 line vainly like a fish a few seconds before getting bopped in the head on deck. Its lowest point was -0.18 back in August and it’s at a measly 0.07. Gold and bitcoin aren’t trading together.
The upside for a portfolio manager is that low correlations with other asset classes makes crypto something that must be at least considered for a portfolio to boost diversification. Between bitcoin and ether, the 90-day correlation coefficient is at a very high 0.80 even though ether trounced bitcoin’s returns in 2021, as did many others.
Brasil Últimas Notícias, Brasil Manchetes
Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.
2022 Mercedes-Benz AMG EQS, 2022 Nio ET5, 2023 Maserati MC20 convertible: This Week's Top PhotosAMG's newest EV, Nio's Tesla Model 3 rival, and a Maserati supercar all made headlines this week.
Consulte Mais informação »
World economic output to top $100 trillion in 2022 for first timeChina to become the top economy in dollar terms in 2030, two years later than previously forecast, while India looks set to overtake France next year and then Britain in 2023 – report
Consulte Mais informação »
Exactly What You Need to Know Before Trying Orangetheory in 2022 — Including the PriceOrangetheory pricing varies depending on where you live, with membership packages typically ranging from $59 to $159 per month.
Consulte Mais informação »
Aries Horoscope 2022: What the Stars Predict for You This Year2022 is your lucky year, Aries, as abundance is the name of the game. But remember, beware of burning bridges.
Consulte Mais informação »
13 Outdated Money 'Facts' You Should Ditch In 2022Nope, nope, nope, please don't believe these 'facts'.
Consulte Mais informação »
Entertainment “Memestocks” Will Be Tested in 2022AMC Theatres (and its executives) benefitted from becoming a meme in 2021, while Donald Trump's company, Triller and Reddit are betting that 2022 may be their year.
Consulte Mais informação »