Entries by Karl Beacham

How to Measure Correlation Between Assets

In the previous episode, we showed you two ways to measure correlation. These were; coefficient of correlation (r) and coefficient of determination (R²). These are two widely used techniques for measuring correlation. However, they do have their limitations. When the quote currency in two fx pairs is the same, there will always be a correlation. […]

Measuring Portfolio Diversification Correlation – A Common Mistake

Take care to avoid common mistakes when Measuring Portfolio Diversification Correlation. It is especially important to not view the results with blinkers on and ignore important information that is right in front of us. Ultimately we want to improve the robustness of our trading strategies and Measuring Portfolio Diversification Correlation is a beneficial way to […]

Measuring Correlation to inform your Portfolio Diversification Strategy

Measuring correlation is as important as portfolio diversification itself. We can’t diversify our portfolio without first measuring correlation between the assets and strategies in our portfolio. In fact, not measuring correlation will potentially lead to the risk we are exposed to increasing. By having exposure in two correlated positions, we are effectively doubling our exposure […]

How to Balance Risk across your Diversified Portfolio

Why do we want a Diversified Portfolio when it reduces our absolute returns? If we think back to our previous video, remember that we’re trying to increase our risk-reward ratio, not absolute returns. We want to balance the risk of our portfolio. We believe that risking 1 to get 1 is better than risking 10 […]

Trading Schedule for the 2021 Easter Holiday Period

Please note the amended Darwinex Trading Schedule for the 2021 Easter Holiday Period is already available in the calendar of Amended Darwinex Trading Hours. Please note during Easter Holidays, swaps will be charged in a different way than on normal weeks. There may be days with swap x6 charges and days without any swap charges at all. The […]