Cryptocurrencies
Even Wild Crypto Can Temper Volatile Stocks, Cornerstone Says
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In the latest twist to a roller-coaster year for traders, investors looking to counter the wild volatility of the stock market can now consider the stabilizing influence of cryptocurrencies, according to Cornerstone Macro LLC.
Strategists including Roberto Perli and Benson Durham used estimates of volatilities and correlations among the S&P 500 and five digital coins, including Bitcoin and Ether, to work out the optimal amount to reduce volatility in portfolios. They found a share of crypto that ranged between 0% and 64% in data back to September 2015, with the average at 6.4%, would help produce such a minimum variance portfolio.