The portfolio bit of it will show you what your capital usage is at any given day and drawdowns on all positions. What if you had signals to get long all 9 stocks and then all 9 drewdown? What's your pain threshhold.
Other point is that even intra-industry can get highly correlated and then not so much through different time periods.
I think these are fairly basic questions that need to be answered before applying any real money.
Yes, i get what you say by the drawdown... i'll try to get some montecarlo simulation to check the risk of ruin, however this is not so important as this strategy would use only a percentage of equity from the hedge fund.
Yes, i get what you say by the drawdown... i'll try to get some montecarlo simulation to check the risk of ruin, however this is not so important as this strategy would use only a percentage of equity from the hedge fund.
