🪐Portfolio Universe
Here is the Portfolio universe of Ovisor!
Indices
Indices are designed like a basket of cryptocurrencies to meet the needs of individual retail investors. Cryptocurrencies are selected based on their market capitalization rankings and race track themes. The Market Cap portfolios are composed using the cryptocurrencies with Top 10, 20, 50, 100, 200, 300 returns respectively. And the Theme portfolios categozize cryptocurrencies into different thems incluing Web3, DAO, Metaverse, etc. The basic selection criteria are listed below.
• Traded on more than 3 exchanges. • Traded over the past 90 days. • Not a stable coin.
The weights of the underlying components are determined by a 90-day average of their market caps. Also, indices are updated on a daily basis. So far, more than 300 cryptocurrencies have been included in the indices. They cover almost all the hottest choices in the market to help retail investors capture profits and accumulate wealth.
Optimized Indices
Determining the weightings by market caps is very intuitive and straightforward . To further improve the portfolio, Ovisor introduces another strategy, namely the optimized indices which strike a balance between return and risk. We use an optimizer to maximize return given lim- ited risks. The return and risk in the optimizer are based on 90-day data. Previously, the weights of the basic index products are determined by market caps and other factors. This does not take into account the investment risk.
Ovisor provides optimizer to better manage users’ portfolios. The optimizer is supported by the mean-variance analysis which consists of two components - expected return and variance. The expected returns and variances of indices are evaluated from historical data using covari- ance matrix. This frames the investment recommendation into a convex problem and derives an optimal solution, i.e., the highest return of the overall choice of indices that satisfy the constraints. Detailed conditions and constraints such as time windows, rebalancing frequency, minimum risk can be customized to obtain each investor’s ideal portfolio.
Whales Portfolio
Transparency is regarded as one of the main advantages of blockchain, Ovisor leverages on this feature to observe big whale’s trading strategies and then learn from their investment decisions. Whales are defined as the ones who trade in huge amounts with return performance ranked in the top 20% of investors.Ovisor gathers whales portfolio information and uses it as reference. For example, information such as the annualized return and Sharpe ratio will be gathered. Daily money flows are also summarized after 5,10, 30 minutes and so on after transactions take place in the whales’ addresses. Ovisor learns from whales and assists users to follow their paces.
Smart Yield Farming
Yield Farming can maximize cryptocurrency holders’ returns by providing liquidity to various token pairs and earning rewards. However, Yield farming can be risky due to price volatility, rug pulls, smart contract hacks, etc.
Ovisor offers Smart Yield Farming recommendations across various DeFi platforms to simplify and secure users’ yield farming activities. Ovisor aggregates different yield farming strategies across yield farming protocols with high security levels like Aave, Curve Finance, Uniswap. Strategies related to the coins, which are important in portfolio will be recommended to users automatically, showing key factors like TVL, APY ranking. Ovisor also has the auto- compounded strategies with higher return for stable coins as a choice for users to invest in.
DAO portfolio
Initially, the DAO portfolio consists of the top 30 market cap tokens (stable coins included) with weightings based on market cap. During two balance dates, users can vote for each token to decide whether to increase or decrease its weight in the next balance date.
wi is the previous weight of a particular token i, ri,u% is the percentage of users who vote for increasing, ri,d% is the percentage of users who votes for decreasing. N is the total number of tokens in the portfolio. The weight of a token after the next balance date is not only decided by one’s own voting result, but also related to others’ results.
In Ovisor Version 1, the interval between two balance dates will be 3 days. Every Ovisor user can vote for all tokens and with the same voting weights.
Alpha Portfolio
Most of the available portfolios in the market now are passive investments. We want to provide investors with a ”Crystal Ball”, or an alpha portfolio, to improve performance and execution. Alpha refers to the excess return earned on an investment. In other words, an alpha portfolio is based on an aggressive investment strategy that seeks additional returns through factor-driven smart coin selection.
Token universe are the tokens that are offered on at least 2 centralized exchanges and has been listed for more than 3 months. The factors mentioned include, but are not limited to, momentum, mean-reversal, volatility, returns, and trading patterns. So far, we have tested the daily data where these factors are combined with the same weightings and the sum is referred to the alpha of a coin. To better manage portfolios, we put the alpha into users’ portfolio optimizer and list the risk and turnover limits. Finally, the optimizer yields the weights of the portfolio based on mean-variance analysis.
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