Are Sectors the New Factors?

When Markets Change, Diversification Evolves.

In this paper, we look inside the Holy Grail of diversification and see how it works in a world where financial markets are as complex as they are fast-paced.

As we will see, we should not take diversification for granted but instead be ready to identify, adapt and quickly exploit diversifying opportunities – like the ones offered from sectors and risk factors – as they arise.

What is needed, is to take a step further: from a well-known principle to a scientific and opportunity-driven approach to diversification to guide investment decision making. 

Inside:

  • The E=mc2 of Finance
  • The More The Merrier? Not Always
  • Opportunities Lie Between and Within Asset Classes
  • Why Sectors Matter
  • Not All Sectors Are Born Equal
  • Where do we go from here?

Other research papers:
ARTIFICIAL INTELLIGENCE

AI in Finance

In this paper, we explore how AI is reshaping the world of Investing.

From medical imaging to space exploration, researchers are now using AI to find ...

FACTOR INVESTING

Fifty Shades of Alpha

In this paper, we take a look at Alpha and the DNA of investment returns, zooming in on what it means to add value in the new era of portfolio managem...