Guide for traders

Let us now consider the possibility of having two variables as before, except that we now consider that the risk degree of a permanent and unexpected platform’s shutdown to be greater than the risk degree of a slow and ineffective Support. The proportion of the significance of the risk of each case carries is something that we will decide. Thus, for example, we consider that a platform’s shutdown significance accounts for 70% of the total significance, and speed-effectiveness of Support the remaining 30%.

In order to find the optimal way of allocating our capital, we have to weigh the two above variables according to the significance of the risk they carry, and then sum up these individual amounts.

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Capital Allocation: Handling Multiple Variables of Different Significance ❺❺❺ - average rating 5 from 5 (based on 232 user reviews)