![]() Indeed, after its introduction by Nakamoto (2008), Bitcoin was launched online in 2009 and paved the way for many other cryptocurrencies. This is particularly true when dealing with peculiarly volatile markets, such as the cryptocurrency one, which could be one of the future target market of robo-advisors, given its rapidly growing influence in the financial world. However, the mechanisms underlying the portfolio construction are often obscure, as well as they arguably do not properly take into account for multivariate dependencies across securities which are key to achieve diversification and, therefore, mitigate financial risk. They are supposed to match the investors' risk profile with specific class of financial assets and thereby build an efficient portfolio allocation for each specific client. In this context, services of automated financial consulting are widely spreading and, in particular robo-advisors 1. ![]() Two technical reports from the Financial Stability Board (FSB) ( FSB, 2017a, b)-establish several key drivers for FinTech, i.e., the shift of consumer preferences on the demand side, the change of financial regulations on the supply side and the technology evolution. The results show that overall our model overperforms several competing alternatives, maintaining a relatively low level of risk.įinTech innovations are rapidly expanding nowadays, with applications including payments, lending, insurance and asset management, among others. In other words, we develop an extension of the traditional Markowitz model which combines Random Matrix Theory and network measures, in order to achieve portfolio weights enhancing portfolios' risk-return profiles. For this reason, we propose a novel approach to build efficient portfolio allocation strategies involving volatile financial instruments, such as cryptocurrencies. However, automated consultancy services are not yet exploiting the potentiality of this nascent market, which represents a class of innovative financial products that can be proposed by robo-advisors. The usage of cryptocurrencies, together with that of financial automated consultancy, is widely spreading in the last few years. 2Department of Economics and Social Sciences, Universitá Politecnica delle Marche, Ancona, Italy.1Department of Economics and Management, University of Pavia, Pavia, Italy.Paolo Giudici 1 *, Paolo Pagnottoni 1 * and Gloria Polinesi 2
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