What is risk parity?

Risk parity sizes positions so each asset (or sleeve) contributes roughly equal risk, not equal dollars. Assets that are quieter get larger notional; noisier assets get less.

The idea

A 60/40 stock-bond mix is dollar-weighted. Stocks usually dominate risk. Risk parity rebalances the mix toward more even risk contributions, often with a volatility target for the whole sleeve.

A typical liquid version uses broad ETFs (equities, bonds, gold, real estate) and rebalances on a schedule. Implementation details (lookback, leverage caps, costs) matter.

On this desk

Quant Eidolon’s paper risk parity sleeve is one of several sleeves in the multi-strategy book. See Strategies for the current plain-English card and Live Paper for whether it is active and at what weight. Multi-year research numbers for the wider book live on Backtests, not as live YTD Sharpe.

What it is not

• Not “risk free.” Equal risk can still lose money together in a crisis.
• Not the same as equal weight or market-cap weight.
• Not a solicitation. This site shows paper process.

Bottom line

Risk parity is a sizing philosophy: balance risk contributions, then rebalance. It is one sleeve among others here, inspectable on Strategies and Live. Soft interest only via Connect.