Do Cryptocurrencies Offer Diversification Benefits for Equity Portfolios?

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F70883521%3A28120%2F21%3A63532098" target="_blank" >RIV/70883521:28120/21:63532098 - isvavai.cz</a>

Result on the web

<a href="https://www.sciendo.com/article/10.2478/sbe-2021-0021" target="_blank" >https://www.sciendo.com/article/10.2478/sbe-2021-0021</a>

DOI - Digital Object Identifier

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Result language

angličtina

Original language name

Do Cryptocurrencies Offer Diversification Benefits for Equity Portfolios?

Original language description

Cryptocurrencies are becoming an exciting topic for legislative bodies, practitioners and scholars with diverse academic backgrounds. Cryptocurrencies operate as financial securities and medium of exchange, this dual function provide a novel outlook for the studies on the field of portfolio management. The work identifies diversification benefits when cryptocurrencies are combined with the portfolios of equity stocks. Three different independent experiments were conducted to observe portfolio benefits generated from cryptocurrencies, in terms of risk and returns. Results from the two experiments show that cryptocurrencies employ higher portfolio risk and generate higher returns when they are involved with equity stocks portfolios. In contrast, outcomes of the first experiment indicate that cryptocurrencies reduce the risk level of the equity portfolios while increase weighted average returns. Hedge funds and individual investors gain new insights on the risk-reward outcomes employed from cryptocurrencies when combined with equity stocks. Results indicate that cryptocurrencies must be seriously considered by the portfolio managers as an essential aspect of the portfolio diversification benefits. Future studies might raise the samples of selected portfolios with stocks from different stock indexes, to identify the problem from a broader perspective. However, providing the equity portfolios with additional stocks lower portfolio risk which is in line with the theoretical paradigms

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50201 - Economic Theory

Project

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Continuities

V - Vyzkumna aktivita podporovana z jinych verejnych zdroju

Publication year

2021

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Studies in Business and Economics

ISSN

1842-4120

e-ISSN

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Volume of the periodical

16

Issue of the periodical within the volume

2

Country of publishing house

PL - POLAND

Number of pages

13

Pages from-to

5-18

UT code for WoS article

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EID of the result in the Scopus database

2-s2.0-85117691367