Let's talk about Non-Correlated Assets. A non-correlated asset is exactly what sounds like: an asset whose value isn't tied to larger fluctuations in the traditional markets. Yes, it's true that broad market movements can impact any asset, even those considered traditionally non-correlated. How do you find non-correlated assets? If it's -1, the stocks move in the opposite directions (i.e. if one stock rises, the other stock goes down), if it's equal to 1, the stock move perfectly in the same direction. If it's equal to 0, the stocks are uncorrelated and their movements are independent of each other. What is a negatively correlated asset? When assets move in the same direction at the same time, they are considered to be positively correlated. When one asset tends to move up when the other goes down, the two assets are considered to be negatively correlated. Assets that don't show any relationship to each other are non-correlated. The benefits of investing in non-correlated assets: (https://www.alphawealthfunds.com/2022/03/the-benefits-of-investing-in-non-correlated-assets/) "Some investors may not account for the correlation level of their portfolio, which can negatively affect them in the long run. For example, real estate and bonds can be affected by changes in interest rates, which means that if one of them starts sinking, the other is likely to follow suit (positively correlated). This is where non-correlated assets come into play. They are assets whose value is not directly tied to fluctuations in the traditional markets and are less likely to be affected by market volatility and economic news. Here are some examples of such assets:
• Gold and precious metals
• Real estate or REITs (real estate investments trusts)
• Emerging market bonds
• Collectibles and possessions such as art and wine
• Hedge funds
This list is non-exhaustive and is meant to act as an example. When investing in non-correlated assets, be sure to research the options that best fit your individual financial situation and your investment goals. Benefits of Non-Correlated Assets The main benefit of having non-correlated assets is that they help you reduce the risk in an investment portfolio while boosting your chances of getting higher returns long-term. For example, in the case of an unpredictable market event that tanks the value of many positively correlated investments, non-correlated assets can help maintain a good level of portfolio performance. This is also related to the modern portfolio theory, which is based on the idea that markets are efficient if you use diversification to spread investments across different asset categories. Final Thoughts Having a diverse portfolio is always a good idea. It helps you protect your returns and lowers the investment risk you take on. No matter which investment theory you support, non-correlated assets can be a huge benefit when implemented as part of your investment strategy." So a non-correlated asset is exactly what it sounds like: an asset whose value isn’t tied to larger fluctuations in the traditional markets. A hedge; a store of value in a crisis. A Ruby, a collectible, is such an asset - FIX00 will be the first-ever to digitalise such assets (as we have detailed from our WP, to the website to endless blogs). Yes, it’s true that broad market movements can impact any asset, even those considered traditionally non-correlated. But as a rule, certain types of assets are generally less reactive than stocks to economic news and market volatility. FIX00 is such an asset, and our forthcoming issuance of digitalised F-NFTs will allow for ownership, portability, and an asset-backed value play. Before we sign off on today's blog commentary it would be remiss to not look at risk and non-correlated assets.
It's important to note that accessing non-correlated markets carries with it an extra layer of risk when compared to investing in public assets such as stocks and bonds. The foremost is liquidity risk. Non-correlated assets are limited in the number of investors who can access them -- after all, only one person at a time can own a particular painting or another limited asset -- there is less liquidity in the market than in something like typical public equities. You may not always be able to find a buyer for shares you’re looking to sell. FIX00, and the crypto market, are reshaping the traditional closed auction-based market, and by fractionalising the asset (legal comment - in the same way, a large rough gem is "fractionalised" to make jewellery; all of this occurs in non-regulated markets); we are creating all-new liquid, deep and transparent markets where price discovery is clear and mitigates this risk.
At the same time, information about these types of assets can be limited as they are not held to the same reporting and transparency standards as public assets. It can be difficult for investors to gather information about the underlying performance and long-term outlook for a non-correlated asset.
Rubies have an extensive history of being stores of value and non-correlated assets, the history of our gems is detailed in their extensive appraisals but also we intend to keep buyers informed of valuations while giving regular appraisals (bi-annually) of the underlying ruby or rubies - all at the expense of FIX00, not the purchaser. Our products, our markets, our way! For more information, please read our white paper 🙂 which you can access via this link: https://www.fix00.com/_files/ugd/33013c_0591512fdaec4661b78e38764be2997e.pdf?utm_campaign=336f6f8d-7107-42ad-8b96-e4536bb67060&utm_source=so&utm_medium=mail&cid=425ee4a5-a684-4ffd-8efb-f31a775def70
For a short overview of the FIX00 project 🙂 please use this link: The Start of something new If you still have questions, we are happy to have you join us. We take great pride in our company and the revolutionary change it heralds. Please feel free to contact us if you need further information or have further questions:: Contact Us
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