First example is for a fairly long term backtest using UOPIX (double Nasdaq with high fees) and a treasury bond fund 9also high fees). Test from 1999 - 2019:https://tinyurl.com/yxhh3mucCAGR 12.53SD 12.25Best Yr 34.63Worst Yr -0.68MDD -15.81A modified version using newer leveraged ETFs but only from 2011 - 2019https://tinyurl.com/yxk54ucuCAGR 22.03SD 12.26Best Yr 52.86Worst Yr 7.65MDD -6.51 Click on the Timing Periods link to see the monthly allocations. Evidently the Volatility increases in Down markets so that allocations to equities are reduced but increased in smother Up markets.
Can you explain how the risk parity allocation works in layman terms?
A pretty good link with supporting other links to papers giving a deep dive is:Risk Parity Made Easy: Cliff’s Notes and Other Key Readingshttps://blogs.cfainstitute.org/investor/2016/06/02/risk-pari...
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