Witan Way

Diversification Lab

What changes if I add a diversifier?

Start from US equities alone, then move one other asset in. See what got calmer, what got shallower, and what it cost — over the exact period the two actually share.

Your comparison

Base portfolio

100% US equities

20%

US equities give up exactly the same amount. The total is always one hundred percent.

Computing this scenario...

Questions about this tool

Why does the period change when I change the asset?
Because the comparison only uses history both assets actually have. Bitcoin's starts in 2019, so choosing it shortens the window to seven years. Holding the period fixed would mean inventing the missing years.
Why is the weight capped at thirty percent?
Because this is a teaching instrument, not a portfolio optimiser. Within that range the effect of adding a diversifier is visible and the base portfolio is still recognisably itself.
Does a better result here mean I should hold it?
No, and the tool is built not to say so. It reports what one historical period did. A different period, a different weight or a different starting portfolio can reverse every one of these three numbers.

Witan Way is an independent, rules-based investing education platform. Nothing published constitutes personalised investment advice, a solicitation, or a recommendation to buy or sell. Capital is at risk. © Witan Way.