The explanation for why risk parity works reside in two parallel theoretical frameworks for investment. The first is modern portfolio...

The objective of risk parity is managing risk. A portfolio contains three principal drivers of risk: public markets, strategy, and...

The strategic rationale for an asset class is whether it improves portfolio efficiency (i.e., the ratio of return-to-risk). The...

Traditional asset allocation varies the asset class weights when optimizing the portfolio for efficiency. A problem arises from this...