Statistical Analysis and Model Testing of Factors Influencing the Changes of the Volume of Alternative Investments

Financial markets are cyclical. Adding alternative assets to portfolio testifies to the fact that the alternative investments make portfolio safe from market changes and black swan events. An important goal of alternative investment is to reduce portfolio risk while maintaining a given level of return. The expected return on alternative investments is often higher than on traditional, but they are more long-term. Using data on volume of alternative investments will be University Endowment Investment Portfolios, Sotheby’s anconsulting companies reports this paper aims to analyze the changes of volume of alternative investments in times of crisis and periods of high volatility. The research also seeks to determine how alternative assets effect the investment portfolio performance. As this study aims specifically at measuring the effect of alternative investments, this work will only study the practice of investing institutional investors, as well as assets characteristics.