Can Risk be Predicted?
It is common to attempt to predict returns but studies show that it is devilishly difficult to get right and therefore largely pointless.
Instead, Scalable Capital attempts to predict risk on the basis of what is known as ‘probability clustering’ which shows that high volatility, and therefore greater risk today, correlates to the probability of greater risk tomorrow; it uses forward projections of risk to ensure that a client’s portfolio is balanced to reflect their individual appetite to risk as well as that expected in the market.
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