Our research is logic and scientifically driven. We recognise that success in investing comes with logical brainstorming, rigorous analysis, examination, testing and backtesting of every aspect of an investment theme. Even then, a prototype needs to be tested under live market conditions before we can even begin to claim that it has any chance of success.
We carry out our research in stages:
- define a logical investment hypothesis;
- evaluate that the hypothesis is independent and uncorrelated from existing investment strategies;
- design an investment plan able to capture the profit embedded in the hypothesis;
- convert the plan into a systematic approach;
- rigorous testing and backtesting of the strategy using real historic data that can go back up to 130 years;
- simulation of the strategy in combination with existing strategies to evaluate whether it enhances risk-adjusted returns;
- trade on paper the strategy using real market data;
Our edge comes from blending uncorrelated strategies that our research has given us reasonable assurance that they have positive expectancy. Uncorrelated is the main word here and it is another filter we adopt. A great strategy may tick all the boxes of our research, however it is of no value to us if it does not generate uncorrelated positive performance to existing strategies. In other words, only uncorrelated investment strategies with satisfactory positive expectancy can add value to risk-adjusted returns and become candidates for adoption.
Our flagship investment product, Dimacos Diversified Program, blends a collection of trend-following and value-investing strategies. Although both sets have positive expectancy over the long-term, they are designed in a way that makes them uncorrelated and independent to each other over long periods. As such they complement one another in a way that creates an attractive investment program with sound expected risk-adjusted returns.
For more information on Dimacos Diversified Program click here.