Stock Market Trading Blends

According to Modern Portfolio Theory, the only "free lunch" in the world of investing is the all important concept of Diversification.

The concept states that by combining investments that have low correlation to each other, you can reduce overall portfolio volatility while still maintaining good return (also known as maximizing Sharpe Ratio).

In the context of our service, the subscriber would benefit by spreading their investment over two or more systems rather than putting all their money in one system. Doing so would effectively give the subscriber greater staying power through drawdowns as non-correlated systems tend to not have drawdowns at the same time.

Below is a correlation matrix of our systems computed using monthly returns:


There are many system combinations and allocations the subscriber can construct. Below are some blends we think are quite interesting using correlation as the main criterion:

Blend 1 invests using an equal allocation to HYDRA and WEEKLY STOCK SELECTOR. These two systems are conceptually very different and therefore have a low correlation. Note that the blend has a higher Sharpe Ratio and lower drawdown than either of the individual systems.


Blend 2 invests using an equal allocation to HYDRA and RISK-ON/RISK-OFF. These two have highly distinct underlying algorithms exhibiting a low correlation.


Blend 3 invests using an equal allocation to HYDRA, XAU GOLD and RISK-ON/RISK-OFF. This blend combines 3 very diverse investment strategies, each one capitalizing on a distinct concept/edge - this produces a more consistent performance and risk profile over time.

Blend 4 invests using an equal allocation to HYDRA and OVERNIGHT EDGE PLUS. This blend achieves diversification across investment themes as well as holding periods.

Blend 5 invests using an equal allocation to the monthly traded strategies HEDGED SECTOR ROTATION and LONG TERM TREND. This tactical blend aims to generate market beating performance with a minimal time commitment (just a few minutes each month).

Blend 6 invests using an equal allocation to HYDRA and INDEX TRADER LONG/SHORT. This blend combines the long-only technique of Hydra with the unconstrained exposures of Index Trader Long/Short to participate in bear market periods.

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