Carry Strategies Across Asset Classes: Mathematical Foundations
- Fabio Capela
- Carry trading , Quantitative finance , Asset pricing , Risk premia , Cross asset strategies , Mathematical finance , Alternative beta , Systematic trading
Imagine borrowing money at 1% and lending it at 5%. The 4% difference seems like an obvious profit, yet financial theory suggests this opportunity shouldn’t exist. Markets should quickly eliminate such discrepancies through arbitrage. But across currencies, bonds, and stocks, these “carry” opportunities persist with remarkable consistency.
Read MoreThe Minimum Correlation Algorithm: Rethinking Portfolio Diversification Through Mathematical Elegance
- Fabio Capela
- Portfolio optimization , Quantitative finance , Diversification strategies , Risk management , Algorithmic trading , Modern portfolio theory , Asset allocation , Investment mathematics
“Don’t put all your eggs in one basket” – this timeless wisdom has evolved into one of finance’s most fundamental principles. Yet despite diversification’s universal acceptance, its mathematical underpinnings remain poorly understood by most practitioners. The conventional approach treats diversification as simply holding many assets, but this perspective misses the profound mathematical reality that drives risk reduction in portfolios.
Read MoreBuilding a 3-Fund Portfolio: Step-by-Step Walkthrough
- Fabio Capela
- Portfolio management , Index investing , Investment strategy , Simple investing , Asset allocation , Etf investing , Mutual funds , Beginner investing
By the end of this guide, you’ll know exactly how to build and maintain a complete investment portfolio using just three low-cost index funds. No complicated stock picking, no timing the market, no endless research required.
Read MoreWhy I Stopped Believing You Have to Choose Between High Returns and Low Risk
- Fabio Capela
- Low volatility investing , Risk management , Portfolio optimization , Systematic investing , Investment strategy , Volatility control , Asset allocation , Risk return analysis
Every investor gets told the same story: if you want high returns, you have to accept high risk. Want to play it safe? You’ll have to settle for mediocre returns. It’s supposedly the fundamental law of investing, as immutable as gravity.
Read More