Cavalier Funds


Adaptive Correlation



The assurance of Modern Portfolio Theory (MPT), introduced by Harry Markowitz in the 1950s, had been that a relatively simple, static allocation of assets could weather any market environment.

Three major market corrections in less than 30 years, though, brought a different message to investors: They had to seek to become more agile in adapting their allocations to shifting markets — or suffer any consequences that could result from not doing so.

We adhere to the theory of adaptive correlation in our portfolio models.  Unlike traditional, strategic  buy-and-hold tenets of MPT; we believe adaptive correlation offers a flexible way to off-set short-term market events by gradually, but quickly, reallocating assets to where they will be most effective.

The Case For Adaptive Correlation

Cavalier is a manager of managers investment platform that strives to deliver adaptive correlation ‎strategies to financial advisors. Cavalier’s solutions attempt to make portfolios more dynamic by systematically turning risk on or off based on market conditions.  By adapting a Cavalier solution, financial advisors can now offer a management  process  to their clients which seeks to deliver relative returns in up markets, protect against losses in down markets, and minimize trading costs in client accounts.

Evolution of Money Management

Cavalier’s product offerings, along with deep distribution affiliations, strive to ensure that advisors and investors have the tools they need to construct portfolios which can evolve in a dynamic direction, while seeking to perform admirably in virtually all market conditions.

By integrating adaptive correlation techniques into a portfolio, investors have the potential to out-perform in up markets, while tempering downside risk.