Post by account_disabled on Mar 5, 2024 5:08:20 GMT -6
The rise of cryptocurrencies dates back to the introduction of Bitcoin in and since then investors and traders have identified them as an attractive investment alternative to increase the total return of their portfolios through the diversification of their financial assets. Some of the most popular cryptocurrencies today are Bitcoin, Litecoin, Ethereum, Dash, NEM, and IOTA, among others. The value of each of them fluctuates according to certain variables that affect their supply and demand and, in this sense, they are not homogeneous. This means that its incorporation into an investment portfolio can bring benefits related to the low correlation between the assets, which reduces its total risk.
Through this article we will be exploring some reasons why you could consider cryptocurrencies to improve the performance of your investment portfolio. How are financial assets categorized according Iraq Telegram Number Data to their risk? There are various ways to classify stock market financial assets according to their liquidity, risk and form of compensation. Through this classification, an investor can perform an analysis of his or her portfolio to identify which asset class his or her funds are concentrated in and this helps understand the degree of diversification of said portfolio. For the purposes of this article, we will focus on the classification of financial assets by their risk. Risk is determined as the potential deviation from expected results, commonly measured through the standard deviation (SD) of the instrument or portfolio. The greater the standard deviation, the greater the risk of said financial asset.
In this sense, we can classify the various financial instruments available on the market in three ways: Low risk Low-risk financial instruments are those whose probability of default (in the case of fixed income instruments) is very low, and they tend to obtain very high credit ratings. This is the case of American treasury bills, also known as T-Bills. Additionally, there are fixed income instruments called “investment grade corporate bonds” that, despite not being completely risk-free, have a considerably low risk level. Medium risk Medium risk financial instruments are those that have an intermediate probability of generating a performance lower than expected or falling into default status.
Through this article we will be exploring some reasons why you could consider cryptocurrencies to improve the performance of your investment portfolio. How are financial assets categorized according Iraq Telegram Number Data to their risk? There are various ways to classify stock market financial assets according to their liquidity, risk and form of compensation. Through this classification, an investor can perform an analysis of his or her portfolio to identify which asset class his or her funds are concentrated in and this helps understand the degree of diversification of said portfolio. For the purposes of this article, we will focus on the classification of financial assets by their risk. Risk is determined as the potential deviation from expected results, commonly measured through the standard deviation (SD) of the instrument or portfolio. The greater the standard deviation, the greater the risk of said financial asset.
In this sense, we can classify the various financial instruments available on the market in three ways: Low risk Low-risk financial instruments are those whose probability of default (in the case of fixed income instruments) is very low, and they tend to obtain very high credit ratings. This is the case of American treasury bills, also known as T-Bills. Additionally, there are fixed income instruments called “investment grade corporate bonds” that, despite not being completely risk-free, have a considerably low risk level. Medium risk Medium risk financial instruments are those that have an intermediate probability of generating a performance lower than expected or falling into default status.