Benchmarking
Compare against market benchmarks
Evaluate portfolio performance by comparing it to market indices, asset classes, and investment strategies.
How Benchmarking Works
Evaluating portfolio performance requires an objective comparison framework. Benchmarking enables the assessment of your investments against market standards to ground investment decisions.
The portfolio is compared with established benchmarks such as market indices, asset classes, and defined investment strategies. This provides the necessary context to evaluate relative performance (outperformance vs. underperformance).
Market Index Comparison
How does the portfolio perform relative to the market?
With a holding period of six months for Bitcoin and Ethereum, the question of relative performance to the overall market arises.
Benchmarking tools enable the comparison of the portfolio with relevant crypto indices (e.g., Crypto Market Cap Index or DeFi Pulse Index). This can reveal whether a diversified index portfolio would have achieved higher risk-adjusted returns than individual asset selection. This analysis serves to verify and, if necessary, adjust the investment strategy.
Long-term performance trends are more significant than short-term volatility.
Functionality:
- Comparison of portfolio with crypto market indices
- Performance analysis relative to market benchmarks over defined periods
- Calculation of risk-adjusted returns
- Visual representation of relative performance
Asset Class Benchmarking
Allocation Analysis
Different assets exhibit diverging performance characteristics. Stablecoins correlate differently than volatile altcoins. Lending protocols have different risk profiles than trading strategies.
Benchmarking compares holdings with specific asset classes. This allows determining if, for example, stablecoin allocation underperforms compared to average DeFi lending rates or if altcoin exposure is disproportionate relative to the risk profile. These comparisons serve as a basis for strategic rebalancing.
Functionality:
- Benchmark against specific asset classes (Stablecoins, DeFi, Altcoins)
- Performance comparison within each asset category
- Identification of opportunities within asset classes
- Attribution analysis of return drivers
Strategy Comparison
Active vs. Passive Performance
Comparing active trading strategies (market timing) with passive approaches is essential for performance evaluation.
Active trading results are contrasted with passive strategies like Dollar-Cost Averaging (DCA) or a buy-and-hold approach. This can reveal whether a passive approach with lower risk and lower transaction costs would have achieved superior performance. The goal is the objective evaluation of strategy efficiency.
Functionality:
- Comparison of portfolio with passive investment strategies (DCA, Buy-and-Hold)
- Benchmark against weighted portfolio models (e.g., 80% BTC, 20% ETH)
- Visualization of performance delta (Alpha)
- Metrics for efficiency evaluation of active vs. passive approaches
Risk-Adjusted Returns
Risk-Weighted Performance Analysis
A high nominal return must be evaluated in the context of volatility.
Benchmarking considers not only absolute returns but calculates risk-adjusted metrics like Sharpe Ratio and Sortino Ratio. Comparing risk-adjusted performance with market benchmarks indicates whether the achieved return adequately compensates for the risk taken.
Functionality:
- Calculation of risk-adjusted return metrics (Sharpe Ratio, Sortino Ratio)
- Comparison of risk-adjusted performance with benchmarks
- Representation of volatility-adjusted returns
Period Analysis
Performance Over Different Timeframes
Consistency over time periods is a key indicator of strategy quality.
The tools enable performance comparison over various time periods (daily, weekly, monthly, quarterly, yearly). This helps differentiate between short-term outliers and sustainable under- or outperformance against the benchmark.
Functionality:
- Performance comparison across multiple timeframes
- Analysis of performance under different market conditions
- Identification of trends relative to benchmarks
- Evaluation of investment strategy consistency
FAQ
We compare your portfolio against major crypto market indices, asset classes (stablecoins, DeFi, altcoins), and proven investment strategies like Dollar-Cost Averaging and buy-and-hold approaches. You can also create custom benchmarks based on your specific investment goals.
Benchmark data is updated in real-time based on current market conditions. Historical comparisons use accurate historical data to ensure fair and meaningful comparisons across different time periods.
Yes. You can create custom benchmarks based on specific asset allocations, strategies, or market indices that match your investment goals. This lets you compare your portfolio against benchmarks that are most relevant to your situation.
Risk-adjusted returns account for the volatility and risk you're taking to achieve your returns. We calculate metrics like Sharpe Ratio and Sortino Ratio, comparing your risk-adjusted performance against market benchmarks. This helps you understand if you're being properly compensated for the risk you're taking.