Portfolio diversification has become a prominent subject in recent years, as assets like cryptocurrencies show an increasingly strong correlation with major stock indices. The previously uncorrelated asset class now trades lockstep with stocks yet is even more viciously volatile.
The recent macro environment has made which assets you take a position in and what side of the market you are on critical to survival. Using PrimeXBT and its massive list of digital and traditional assets, portfolio diversification is simplified and more accessible than ever before.
Here is a look at the list of PrimeXBT trading instruments and how they can be used effectively to protect capital and increase the potential for profits.
A Primer On Portfolio Diversification Benefits
During the recent post-pandemic bull run, risk assets like stocks and crypto took off like a pair of rockets in parallel flight. Investors piled in as cryptocurrencies figuratively went to the “moon.”
The only problem is that when the stock market began to topple, the sudden and strong correlation between major US stock indices like the Nasdaq and S&P 500 took crypto assets like Bitcoin and Ethereum down with them. Less liquid coins like Dogecoin were decimated and lost as much as 90% in value.
A portfolio heavy in these assets went from several times over in the green to severely underwater and deeply in the red. Those who moved capital to commodities like oil would have earned substantial profits during this time. With inflation running hot, gold also would have protected wealth better than crypto or equities. The dollar also performed strongly relative to other currencies and assets in this economic environment, for example.
Available Assets From Award-Winning Margin Trading Platform
The takeaway above is that the right mix of trading instruments can diversify a portfolio so that no opportunities are left behind, but the risk is appropriately spread out across uncorrelated or anti-correlated asset classes.
Well-diversified portfolios suffer less damaging drawdowns and don’t miss out on winners as often. With PrimeXBT, traders get even more control with long and short positions on more than 100 different assets under just one roof.
The list of trading instruments available 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 index is listed. This includes all major US, European, and Asian stock indices like 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 macro 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 provide some of the most interesting diversification options.
Forex currencies have had a dramatic shakeup since the pandemic struck, and monetary policy shifted across the board. Global inflation made anything trading against the dollar a decent short opportunity. PrimeXBT offers all major pairs, plenty of minors, and a mix of exotics from emerging markets.
Portfolio Diversification With PrimeXBT Explained
Once again, using crypto and stocks as an example, a portfolio too heavy in these assets would have missed out on the energy sector’s incredible profits or the safe haven provided by golf and silver. Such portfolios could also benefit from the stability of forex currencies.
Positioning doesn’t always have to be on the long side, either. PrimeXBT provides long and short positions for total flexibility. Short positions can hedge against successful longs when markets get shaky. Strategic long and shorts leave no global market untapped or opportunity unturned.
A careful mix 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 further ways traders can gain an edge in markets.
Summary: How PrimeXBT Provides Unparalleled Portfolio Diversity
PrimeXBT offers all this and more. Margin trading is only the tip of the iceberg. The platform is also home to the Covesting copy trading module, yield accounts, weekly competitions, and the PrimeXBT trading academy.
Even better, all of these tools and trading instruments are accessible from the PrimeXBT mobile app for Android and iOS devices. The app recently received a new update that introduced even more new features to the already packed suite of products and services.
For those seeking unrivaled portfolio diversity and don’t want to manage dozens of accounts or platforms to do so can find everything they need and more at the award-winning PrimeXBT. Stop leaving your capital at risk and check it out now.