Windham Capital Develops Strategy for Global Risk

The Windham Investment Risk Cycle strategy was designed to measure the interactions between global markets and determine how fragile one may be.

Windham reports the new strategy is not based on price volatility alone – as most other models are – but instead measures the interactions among asset classes to gauge opportunities in all market environments.   

Windham’s approach addresses the fact that risk has hidden linkages across the broader economy, making the global markets even more fragile.  Expectations for sustained slow economic growth and continued market volatility signal a time to proactively manage risk rather than react to it.   

The Windham Investment Risk Cycle uses proprietary measures of risk, including turbulence, which shows the interactions among a wider set of assets and is designed to anticipate broader market selloffs, and systemic risk, which reflects how fragile a market might be based on whether it is “tightly coupled” (unrelated sectors move in unison) or “loosely linked” (little price correlation).  

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