November 14, 2024

Quant Radio: A Risk Parity Approach to Leveraged ETFs

11 minutes

In this episode, we tackle the intriguing world of Risk Parity Portfolios with Leveraged ETFs. Learn how a balanced approach to portfolio management can aim to spread risk more evenly across diverse asset classes, moving away from just high-return chasing to a more strategic risk management approach.

We'll explore:

The Concept of Risk Parity: Discover how this strategy aims to balance risk instead of maximizing return, likening a portfolio to a well-rounded team where each asset class contributes stability.

Leveraged ETFs: See how these tools can amplify both gains and losses and why they require careful handling. We'll discuss key leveraged ETFs like TQQQ, SVXY, VXZ, TMF, EDZ, and UGL and how they contribute to a diversified portfolio.

Advanced Risk Management: We cover beyond-the-basics risk measures like Conditional Value at Risk (CVR), volatility drag, and the importance of negative correlations among assets. You'll also hear why variance alone might not capture the full risk picture with leveraged ETFs.

Whether you're a seasoned investor or new to advanced investing strategies, this video offers valuable insights on maximizing potential returns while managing risks strategically. Don't forget to like, subscribe, and join the conversation by sharing your thoughts on these strategies in the comments.

For more quant-focused content, join us at ⁠⁠⁠⁠https://community.quantopian.com⁠⁠⁠⁠. There, you can explore a wealth of resources, connect with fellow quants, engage in insightful discussions, and enhance your skills through our extensive range of online courses.
Quant Radio is an AI-generated podcast, intended to help people develop their knowledge and skills in Quant finance. This podcast is not intended to provide investment advice.

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