Many people are familiar with concepts such as the power of diversification, the corrosive impact on long-term portfolio returns of even moderate correlation between strategies or funds, and the fact that the most skilled managers can still go through patches of poor performance.
Users can adjust key inputs to examine the potential outcomes if their forecasts exceed or fall short of expectations, the influence that changes in these various measures can have on overall returns, and the wide range of portfolio outcomes consistent with the same underlying assumptions of skill and correlation.
