"The primary advantages of alternative investments are that they tend to be less correlated to traditional stocks and bonds, and returns of some alternative investments have been quite attractive over time. By diversifying into other types of assets that might produce different return patterns, investo...
A real-world example of spatial arbitrage occurred in the cryptocurrency markets in December 2017.Bitcoin(BTCUSD) was trading at different prices on multiple cryptocurrency exchanges. BTCUSD was priced at around $19,000 on U.S. exchanges while trading as high as $22,000 on South Korean exchang...
Commodity ETFsseek to track the price of physical assets such as gold, oil and wheat. Commodity prices are generally not highly correlated to prices for stocks and bonds; moreover, commodity sectors typically have a low correlation to each other. Commodities also tend to rise in tandem with in...
But wait, isn’t bitcoin extremely correlated to the stock market, and in particular, a product like the ProShares UltraPro QQQ TQQQ ? “While many would point to periods of high correlation to other risk assets and the lack of correlation to a rise ...
plus and counting later in 2019 (all time high $19, 893 BTC/USD exchange rate value); little-b bitcoin ($BTC currency) and big-b Bitcoin (network protocol) are growing stronger daily. This bitcoin guide's goal is simple; educate users (via awareness) and inform investors* (with ...
In particular, Baur and Lucey (2010) and Baur and McDermott (2010) define a safe asset as one that “is uncorrelated or negatively correlated with another asset or portfolio in times of market stress.” Based on this definition, the previous studies on bitcoin and gold asset classification ...
Some financial advisors say crypto can work for a 401(k) plan because its movements are unconnected to the stock market and it functions even if a fiat currency is devalued. "Crypto should be a part of a 401(k) plan because it's a non-correlated alternative asset class," said Ivory ...
For example, the ProShares Short S&P500 ETF (SH) is inversely correlated to the S&P 500 index, meaning when the S&P 500 rises or falls the SH moves in the opposite direction. In some instances, inverse ETFs can also be leveraged ETFs, meaning they look to double or triple the returns ...
Correlation breakdown: Many of LTCM's positions, which were supposed to offset each other, suddenly becamecorrelated, leading to significant losses across the board. Liquidity crisis: As LTCM's positions moved against them, they needed to unwind trades, but the sheer size of their positions made...
USDC is one of the main stablecoins(Image source) The intention behind this is that the supply of USDC should be directly correlated with an equivalent amount of USD held in reserve backing USDC.Other stablecoinscan be backed bycrypto, additionalcommodityassets, or other fiat currencies—not jus...