STRAT Strategy · Updated April 2026 · ~4 min · For TradingView desktop 3.2.1
Crypto Portfolio Rebalancing and Correlation Management
Splitting capital across a few assets and rebalancing to target weights periodically is a passive but robust approach. It auto "sells high, buys low": trim the risers, top up the fallers, back to target weight.
How to rebalance
- Set target weights (e.g. BTC 50% / ETH 30% / stablecoins 20%);
- Trigger on a schedule (e.g. monthly) or a deviation threshold (e.g. weight drifts >10%);
- Sell the overweight, buy the underweight, pull back to target — disciplined, emotion removed.
The correlation trap
Diversification works only if assets are low-correlated. But crypto's harsh truth: in a crash almost all coins fall together (correlation approaches 1). "Diversifying" into ten alts is ten shares of the same Beta. Real diversification comes from a stablecoin/cash allocation and different asset classes — not ten highly-correlated coins.
Tip: use TradingView ratio charts or correlation to observe how coins move together. High correlation is fine in a bull; in a bear, the stablecoin allocation is your real diversification. Pair with pairs trading to understand relative strength.