Top Traders Unplugged SI353: You Don’t Buy It for Returns. You Buy It Because It Works! ft. Yoav Git
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Jun 21, 2025 Yoav Git, a financial expert currently visiting his parents in Israel, dives into the complexities of the global crisis and the oil market. He discusses how portfolios can benefit from negatively correlated assets, even if they yield little in returns. The conversation touches on the ongoing challenges in volatility and how trend-following strategies defy traditional investment wisdom. Git emphasizes the importance of risk management and diverse approaches over superficial performance metrics, urging listeners to reconsider their investment strategies.
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Power of Negative Correlation
- Adding a negatively correlated strategy can improve your portfolio's risk-adjusted returns despite its standalone performance.
- Negative correlation and volatility provide capital efficiency, which can be more valuable than high standalone Sharpe ratios.
Diversify Diversifiers for Sharpe
- Combining trend following, gold, and bonds diversifies a 60-40 equity portfolio and improves Sharpe ratio substantially.
- Bonds gave the best single diversifier performance but combining multiple diversifiers is more effective over the long term.
Trend Following Industry Slowing
- The trend-following industry has become slower, as shown by strong correlation with simple trend indicators.
- Almost any CTA fund is 80-90% correlated with the Soc Gen CTA index, making true replication differentiation difficult.