Dynamic asset allocation boosts portfolio performance by adjusting to market risk.
A new way to build investment portfolios has been discovered. By adjusting which assets to invest in based on how risky the market is, investors can improve their portfolio's performance. This means they can make more money even when the market is unpredictable. The researchers found that by using a special measure of market risk, investors can boost their portfolio's performance in different market conditions. This method focuses on managing extreme risks and measuring how much prices change.