A Study of the Impact of Crypto Assets on Portfolio Risk-Return Characteristics Before and After COVID-19 Outbreak (2014–2020)

Mengyao Liu, Hiroaki Jotaki, Hiroshi Takahashi

Research output: Chapter in Book/Report/Conference proceedingConference contribution

2 Citations (Scopus)

Abstract

Following the COVID-19 outbreak, unlike the plunge in traditional mainstream assets, crypto assets have performed very well. Indices that reflect changes in the crypto assets market have also grown in recent years. However, in terms of cryptocurrency index-related studies, there are not many, and the period analyzed is mostly three years. This study analyzes historical data from July 2014 to April 2020 based on the cryptocurrency index CRIX and six other traditional mainstream assets to verify the impact of crypto assets on traditional portfolios. By using the DCC-GARCH model, this study finds out the low dynamic correlation between the crypto assets and traditional ones. Furtherly, by using the mean–variance model, Cornish-Fisher expansion and T-copula CVaR approach to check the frontier line and portfolio performance, this study finds out that crypto assets have the potential to improve the risk-return characteristics of traditional portfolios.

Original languageEnglish
Title of host publicationAgents and Multi-Agent Systems
Subtitle of host publicationTechnologies and Applications 2021 - Proceedings of 15th KES International Conference, KES-AMSTA 2021
EditorsG. Jezic, J. Chen-Burger, M. Kusek, R. Sperka, R. J. Howlett, Lakhmi C. Jain, Lakhmi C. Jain, Lakhmi C. Jain
PublisherSpringer Science and Business Media Deutschland GmbH
Pages243-254
Number of pages12
ISBN (Print)9789811629938
DOIs
Publication statusPublished - 2021
Event15th International KES Conference on Agent and Multi-Agent Systems-Technologies and Applications, KES-AMSTA 2021 - Virtual, Online
Duration: 2021 Jun 142021 Jun 16

Publication series

NameSmart Innovation, Systems and Technologies
Volume241
ISSN (Print)2190-3018
ISSN (Electronic)2190-3026

Conference

Conference15th International KES Conference on Agent and Multi-Agent Systems-Technologies and Applications, KES-AMSTA 2021
CityVirtual, Online
Period21/6/1421/6/16

Keywords

  • CRIX
  • Crypto assets
  • Portfolio analysis

ASJC Scopus subject areas

  • Decision Sciences(all)
  • Computer Science(all)

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