Allocation and allocation method

Because a Combined and a strategy allocate across different things. The Combined level decides how much of the total capital each member strategy receives; the strategy level then splits that slice across its instruments, which come from its universe — a hand-picked basket, or what a screener returns from its seed universe. Fincanva applies both layers in order and never flattens them into one list of instrument weights. A standalone strategy uses only the strategy level.

What does it look like in practice?

A strategy holds A, B, C and D. Under Equal weights each gets 25%. Switch it to Fixed weights and enter 40, 30, 20, 10: now A gets four times what D gets — same instruments, dates and rebalance cadence, a different split and different results.

Put that strategy in a Combined with two others, on Equal weights: each strategy gets one third of the capital, and inside its third ours still splits 40 / 30 / 20 / 10. A ends up with 40% of one third — about 13.3% of the Combined's capital. That is the two levels, applied in order.

These work at both levels — inside a strategy and when a Combined splits capital across its member strategies: Equal weights, Fixed weights, Inverse volatility, Ranking-based, Risk parity, MPT (Markowitz), Black-Litterman, Max diversification, Min MAD, Min CVaR and Scenario CVaR, CDaR · Conditional drawdown at risk, EVaR · Entropic value at risk, Robust worst case and Stochastic programming.

These work only inside a strategy, across its instruments: Market cap, Min correlation, Beta neutral, Mimicking, Floating, HRP · Hierarchical risk parity, HERC · Hierarchical equal risk contribution and NCO · Nested clustered optimization.

Each method's page states the plan that includes it, compared across plans in what each plan includes. Which methods read history is set out in Calculation window; how a Combined's split differs from a strategy's, in Combined weighting.

The picker ("Choose allocation method") lists every method; its Filter by goal chips start on All, and each other chip keeps the methods serving that goal — a method serving two appears under both. A Combined's picker shows only its methods and their goals.

What does the Simple rules goal mean?

Simple rules: "Weights set by a rule you can read at a glance." Equal weights, Market cap, Ranking-based, Fixed weights and Floating.

What does the Balance risk goal mean?

Balance risk: "No instrument or group dominates the portfolio's risk." Risk parity, Inverse volatility, HRP and HERC.

What does the Diversify goal mean?

Diversify: "Makes use of how differently the instruments move." Min correlation, Max diversification, HRP, HERC and NCO.

What does the Limit losses goal mean?

Limit losses: "Looks at the worst days and periods, not at the average." Min CVaR, CDaR, EVaR, Scenario CVaR, Robust worst case and Stochastic programming.

What does the Optimize goal mean?

Optimize: "Looks for the best mix for a risk and return objective." MPT (Markowitz), Black-Litterman, NCO, Min MAD and Stochastic programming.

What does the Follow a reference goal mean?

Follow a reference: "Tracks or neutralises an index or an instrument." Market cap, which weights the way most broad indices do, and Mimicking and Beta neutral, which work against a reference instrument you choose. None is available to a Combined, so its picker does not show this goal.

Every method, at either level, shares the same vocabulary.

• Weights. One weight per item, as a share of the capital being allocated. Weights are relative: raw numbers that do not add up to 100 are standardized so the capital is fully used. A negative weight is a short position, which only some methods produce — see Direction.
• Rebalance interaction. The method recomputes its weights at each rebalance and the strategy trades back to them; in between they drift with prices. Floating is the deliberate exception.
• Calculation window. Methods that read history read it over the window the app calls In-sample: "Historical window used by the active method for volatility, correlation, beta, and similar calculations. Default 12." Equal weights, Fixed weights, Market cap and Floating do not use it — see Calculation window.
• Covariance matrix. Methods built on volatilities and correlations — Risk parity, MPT, Max diversification, and inside a strategy HRP, HERC and NCO — carry a Covariance matrix choice — see covariance matrix.

Apart from the method, each level has one dial for how much capital works: Leverage inside a strategy, the invested portion at the Combined level.