Stabilize your Investments
Updated: May 18, 2021
Dynamic Overlay Technology from OpenMetrics
Basically, all investment managers seek to actively protect their investments against unwanted drawdowns.
As static* diversification between asset classes does not protect well during severe market crises due to increasing correlation, therefore it is important to manage drawdowns already on asset class levels.
Typical approaches (e.g. volatility based) are too slow to provide meaningful protection. In addition, buying insurance during phases of high volatility is typically expensive.
In this paper we propose an innovative approach to control drawdowns in a dynamic fashion via a dynamic overlay technology.
* Static diversification stands for maintaining a predefined ratio between different asset classes.