Asset Allocation

The asset allocation phase begins, where the investor will compose their portfolio by describing the assets [A] and assigning the respective percentage weight for each [B].

The maximum limit of assets with which to compose a portfolio is 12. Remember not to underweight or overweight the portfolio; for proper functioning, the total sum of weights should always be 100.

TUTORIAL

We have created a cryptocurrency portfolio consisting of 5 assets, using the Binance exchange for the purchase of each asset. The goal of this portfolio is to replicate the market performance over the medium to long term. The estimated portfolio cost is 0.50%. The fixed capital is $10,000.00.

We choose BTC/USDT as the reference benchmark and compose our portfolio with 20% Bitcoin, 20% Ethereum, 20% Avalanche, 20% Solana, and 20% Ripple. The analysis period is set for the entire year 2023.

As shown by the software, our portfolio has generated a higher alpha compared to the market; consequently, the asset allocation composed in this way is preferable to investing solely in BTC. The portfolio has generated over 15% more return than the market.