13
Trading
futures and options involves substantial risk of loss no matter who is
managing your money and is not suitable for all investors. Past performance is not necessarily
indicative of future results.
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2010 Vision Financial Markets LLC. All rights reserved. No
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mechanical means including
information storage and retrieval systems without permission in writing from
Vision Financial Markets LLC.
The Benefits of a
Diversified Portfolio with Managed Futures
In the above example, the overall risk is
reduced by almost 82% from –41.0% to –7.5% and the return also
increases almost 20% from +7.4% to +8.9%. This is mainly due to the
lack of correlation and, in some cases, negative correlation between some of
the portfolio components in the diversified portfolio. There is
even negative correlation between stocks and managed futures as the two
markets move independently from each other.
*Courtesy CME Group: Managed Futures: Portfolio
Diversification Opportunities.
