Reducing Portfolio Risk

BMAMS: Reducing Portfolio Risk

Hello friends - today I'm going to talk to you about creating our portfolio and how we take our individual systems and combine them together to create an overall portfolio.

It is a synergy of all the systems which create a lower risk and higher return over the long term.

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Here is our overall portfolio:

This is the historical result that we have for our portfolio. As you can see a nice upwardly projection are chart with low drawdowns and consistent returns.


But when we look under the hood, so to speak, we see the individual systems. This is the German index system over time:

Here is the EURUSD system:

GBPJPY system:

You can see from these that none of them are by any means perfect. Each one of these systems in and of itself is not perfect.


However, if we group them together and create systems and select systems for our portfolio that have low correlation when combined together create a portfolio which is quite amazing and magical:

Below is a correlation matrix where we have the different systems across the two axis:

This measures how much profit and loss is made the same time between systems.


What we want is each one of our systems to not make profits or losses at the same time as any other system. bMAMS combines systems that trade at different times and make profits and losses at different times.


Then when the combined together they will perform as one coherent as system that doesn't have dramatic drops and is very consistent in its performance year after year.


The correlation is in some of ours systems are even negatively correlated. When they are all combined together on the same chart it looks like this:

So, we see that at times when one is having a downward period others will have an upward period, and vice-versa. This is low correlation and balances out their performances.


This allows us to create a consistent and low risk portfolio of systems that is available for you. We spread the risk across many instruments and systems making your funds safer when you are following us.

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