Running two strategies: does diversification actually help?

Two uncorrelated strategies smooth the equity curve — in theory. In practice they double the discipline, split the attention and often trade the same underlying moves anyway.

Running two strategies: does diversification actually help? — currency correlation diagram
Two currency pairs moving in and out of correlation

What's your experience?

  • the strategies you run together
  • how their results correlate in practice
  • whether the smoothing was worth the complexity
Running two strategies: does diversification actually help? — drawdown and recovery diagram
An equity curve during a drawdown and its recovery

The correlation guide applies to strategies too, not just pairs.

Comments

Log in to join the discussion. Comments follow the community guidelines.

Log in to comment

Loading comments…