Diversified Approach

Diversified Approach

All of our strategies have their own strengths and weaknesses, and outperform/underperform across various market environments.  In turn, diversifying across our volatility strategies (rather than relying on a single strategy) may help reduce drawdowns and increase risk adjusted performance. Further, sticking to a volatility strategy during drawdowns is arguably the most difficult aspect of trading volatility.  Diversifying with multiple volatility strategies that have different strengths/weaknesses across various markets, may make it easier to stick to the strategies over the long-term, giving you a significant edge.

 

If we look at a portfolio diversified evenly across our Tactical Volatility ProZIV Swing Trader, and XIV Yield Trader strategies (rebalanced monthly), we get the results below.

 

Notice how drawdowns are both short in duration and low in magnitude, with maximum monthly drawdown of just 18%.  In addition, the Gain/Loss ratio is high at 4.85.  The favorable risk/reward, coupled with the added peace of mind, makes a diversified approach highly attractive.

 

**Past Performance is no guarantee of future results.**
See our Disclaimer.
See the assumptions of our backtest here.