How to calculate Allocation for non ETF assets?

[Mark Vincent]

I have an investment that pays 7% every year for the last 11 years. I am trying to figure out what percentage of a strategy I would allocate to it vs an LI strategy is there a way to do this? One way I was thinking was to create a fake stock and load the data with a 7% return for 11 years. I was wondering if there is an easier way since the return never changes.

Cheers,
MV

[Frank1 Grossmann]

You can just add any ETF you do not need and then rename the csv file in the data folder and in the QuantTraderUser.ini file. Then you load the csv file into excel and replace the prices wit generic prices so that you get a 7% return per year. Now you can use this ticker.
The disadvantage is that going forward this generic ETF will not be updated. You would need to do this manually within Excel. So, this is only a solution for single backtests.

[Mark Vincent]

Thanks Frank,

[Mark Vincent]

That was very interesting. I added the investment that returns 7% every year to US Market strategy Hedged. Optimized for 3 years and 80% of the time it would allocate 60% to the 7% investment and the rest to the Hedge. Annual return is 10.5% with a sharpe of 3.2 and draw/range of 3.8. For a little extra risk you can add 3% per year to an investment. Obviously the 7% is not guaranteed and has it’s own risk.

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