When discussing “diversification,” look beyond the number of assets and also check for shared exposures and the observation window; historical correlations are not guaranteed to stay the same.
First, consider the data in front of us for $HUMA : Binance spot, 11/03 14:20–15:20 (Beijing time). The price fell 2.64% over this hour, with a trading volume of 493,600 USDT—twice that of the previous hour. The closing price for the period was 0.01991 USDT.
Holding different assets can still mean being exposed to similar market factors at the same time. If these assets rise and fall together during a given period, adding more names does not eliminate shared risks. Correlations can also change with the sample window and market conditions. To assess diversification, look at the relationships between assets, rather than simply counting how many names are on the list.
#HUMA #CryptoChatter
First, consider the data in front of us for $HUMA : Binance spot, 11/03 14:20–15:20 (Beijing time). The price fell 2.64% over this hour, with a trading volume of 493,600 USDT—twice that of the previous hour. The closing price for the period was 0.01991 USDT.
Holding different assets can still mean being exposed to similar market factors at the same time. If these assets rise and fall together during a given period, adding more names does not eliminate shared risks. Correlations can also change with the sample window and market conditions. To assess diversification, look at the relationships between assets, rather than simply counting how many names are on the list.
#HUMA #CryptoChatter