Portfolio diversification has become a hot topic in recent years, as assets like cryptocurrencies show an increasingly strong correlation with major stock indices. The previously uncorrelated asset class now trades at the same pace as stocks, but is even more volatile.
The recent macro environment has made what assets you take a position on and what side of the market you are on are critical to your survival. Using PrimeXBT and its massive roster of digital and traditional assets, portfolio diversification is made easier and more accessible than ever.
Here is an overview of the list of PrimeXBT trading instruments and how they can be used effectively to protect capital and increase profit potential.
An introduction to the benefits of portfolio diversification
During the recent post-pandemic bull run, risky assets like stocks and crypto took off like a pair of rockets in parallel flight. Investors huddled in as cryptocurrencies figuratively went to the “moon.”
The only problem is that when the stock market started crashing, the sudden and strong correlation between major US stock indices like the Nasdaq and the S&P 500 took crypto assets like Bitcoin and Ethereum with them. Less liquid coins like Dogecoin have been decimated and lost up to 90% of their value.
A heavy portfolio of these assets has gone from multiple times in the green to severely underwater and deep in the red. Those who moved capital into commodities like oil would have made substantial profits during this time. With rampant inflation, gold would also have protected wealth better than crypto or stocks. The dollar has also performed well against other currencies and assets in this economic environment, for example.
Assets available from the award-winning margin trading platform
The point to remember above is that the right combination of trading instruments can diversify a portfolio so that no opportunity is missed, but risk is spread appropriately across uncorrelated asset classes or anti-correlated.
Well-diversified portfolios experience fewer damaging declines and don’t miss out on winners as often. With PrimeXBT, traders have even more control with long and short positions in over 100 different assets under one roof.
The list of available trading instruments includes:
Cryptocurrencies have become an important new asset class for the digital age. Popular assets include Bitcoin, Ethereum, Solana, and Dogecoin. More exotic altcoins from trending categories like GameFi, Metaverse, DeFi and others are also offered.
You name it, and the most important stock market index is listed. This includes all major US, European and Asian stock indices such as the Dow Jones Industrial Average, S&P 500, FTSE, DAX 30, Nikkei and many more.
Commodities have become an increasingly important part of the global macroeconomic and geopolitical landscape, especially as inflation drives up the prices of these scarce assets. Oil, natural gas, gold and silver are all listed on PrimeXBT and offer some of the most attractive options for diversification.
Forex currencies have undergone a dramatic upheaval since the start of the pandemic and monetary policy has changed across the board. Global inflation has made anything trading against the dollar a decent short opportunity. PrimeXBT offers all major pairs, many minors and a mix of emerging market exotics.
Portfolio diversification with PrimeXBT explained
Again, using crypto and stocks as an example, a portfolio too heavy in these assets would have missed the incredible profits of the energy sector or the safe haven offered by golf and silver. These portfolios could also benefit from the stability of forex currencies.
Positioning doesn’t always have to be on the long side either. PrimeXBT offers long and short positions for complete flexibility. Short positions can hedge against successful long positions when markets turn fragile. Strategic long and short positions leave no untapped global market or untapped opportunity.
A judicious combination can protect capital against correlation risk, minimize losses and maximize exposure, making massive profits infinitely more possible. Stop-loss protection, technical analysis tools and more add more ways for traders to gain an edge in the markets.
Summary: How PrimeXBT Delivers Unparalleled Portfolio Diversity
PrimeXBT offers all of this and more. Margin trading is just the tip of the iceberg. The platform also hosts the Covesting copy trading module, performance accounts, weekly competitions, and the PrimeXBT trading academy.
Best of all, all of these trading tools and instruments are accessible from the PrimeXBT mobile app for Android and iOS devices. The app recently received a new update which introduced even more new features to the already comprehensive suite of products and services.
For those looking for unparalleled portfolio diversity and don’t want to manage dozens of accounts or platforms, they can find everything they need and more on the award-winning PrimeXBT. Stop leaving your capital at risk and check it now.