Do Cryptocurrencies Offer Diversification Benefits for Equity Portfolios?
Cryptocurrencies are becoming an exciting topic for legislative bodies, practitioners, media, and scholars with diverse academic backgrounds. The work identifies diversification benefits when cryptocurrencies are combined with the equity instruments from Visegrad Stock Exchanges. Furthermore, the re...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Sciendo
2021-08-01
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| Series: | Studies in Business and Economics |
| Subjects: | |
| Online Access: | https://doi.org/10.2478/sbe-2021-0021 |
| _version_ | 1818792246473916416 |
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| author | Aliu Florin Nuhiu Artor Knapkova Adriana Lubishtani Ermal Tran Khang |
| author_facet | Aliu Florin Nuhiu Artor Knapkova Adriana Lubishtani Ermal Tran Khang |
| author_sort | Aliu Florin |
| collection | DOAJ |
| description | Cryptocurrencies are becoming an exciting topic for legislative bodies, practitioners, media, and scholars with diverse academic backgrounds. The work identifies diversification benefits when cryptocurrencies are combined with the equity instruments from Visegrad Stock Exchanges. Furthermore, the results of the study explore financial and economic benefits for the investors of combining cryptocurrencies with equity stocks on the mixed portfolio. Three different independent experiments were conducted to observe diversification benefits generated from cryptocurrencies. Results from the two experiments show that cryptocurrencies employ higher portfolio risk and generate higher returns when they are involved with equity stocks portfolios. The first experiment indicates that cryptocurrencies reduce the risk level of the equity portfolios while increase average returns. Providing the equity portfolios with additional equity stocks lower the portfolio risk which is in line with the theoretical paradigms. 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. |
| first_indexed | 2024-12-18T15:24:12Z |
| format | Article |
| id | doaj.art-439887f9a0d44d0c80479a917189cc92 |
| institution | Directory Open Access Journal |
| issn | 2344-5416 |
| language | English |
| last_indexed | 2024-12-18T15:24:12Z |
| publishDate | 2021-08-01 |
| publisher | Sciendo |
| record_format | Article |
| series | Studies in Business and Economics |
| spelling | doaj.art-439887f9a0d44d0c80479a917189cc922022-12-21T21:03:19ZengSciendoStudies in Business and Economics2344-54162021-08-0116251810.2478/sbe-2021-0021Do Cryptocurrencies Offer Diversification Benefits for Equity Portfolios?Aliu Florin0Nuhiu Artor1Knapkova Adriana2Lubishtani Ermal3Tran Khang4Faculty of Economics, University for Business and Technology, KosovoFaculty of Law, University of Prishtina, KosovoFaculty of Management and Economics, Tomas Bata University, Czech RepublicFaculty of Economics, University for Business and Technology, KosovoFaculty of Management and Economics, Tomas Bata University, Czech RepublicCryptocurrencies are becoming an exciting topic for legislative bodies, practitioners, media, and scholars with diverse academic backgrounds. The work identifies diversification benefits when cryptocurrencies are combined with the equity instruments from Visegrad Stock Exchanges. Furthermore, the results of the study explore financial and economic benefits for the investors of combining cryptocurrencies with equity stocks on the mixed portfolio. Three different independent experiments were conducted to observe diversification benefits generated from cryptocurrencies. Results from the two experiments show that cryptocurrencies employ higher portfolio risk and generate higher returns when they are involved with equity stocks portfolios. The first experiment indicates that cryptocurrencies reduce the risk level of the equity portfolios while increase average returns. Providing the equity portfolios with additional equity stocks lower the portfolio risk which is in line with the theoretical paradigms. 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.https://doi.org/10.2478/sbe-2021-0021cryptocurrenciesportfolio riskequity stocksfinancial investorsregulators |
| spellingShingle | Aliu Florin Nuhiu Artor Knapkova Adriana Lubishtani Ermal Tran Khang Do Cryptocurrencies Offer Diversification Benefits for Equity Portfolios? Studies in Business and Economics cryptocurrencies portfolio risk equity stocks financial investors regulators |
| title | Do Cryptocurrencies Offer Diversification Benefits for Equity Portfolios? |
| title_full | Do Cryptocurrencies Offer Diversification Benefits for Equity Portfolios? |
| title_fullStr | Do Cryptocurrencies Offer Diversification Benefits for Equity Portfolios? |
| title_full_unstemmed | Do Cryptocurrencies Offer Diversification Benefits for Equity Portfolios? |
| title_short | Do Cryptocurrencies Offer Diversification Benefits for Equity Portfolios? |
| title_sort | do cryptocurrencies offer diversification benefits for equity portfolios |
| topic | cryptocurrencies portfolio risk equity stocks financial investors regulators |
| url | https://doi.org/10.2478/sbe-2021-0021 |
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