Five-sleeve allocation calculator

Return, risk, real return, a shock scenario and which sleeve drives it.

Interactive: five-sleeve allocationMedium

Weights, expected returns and volatilities are yours to change. The correlation between equities and bonds is the input that matters most — it was negative for two decades and positive in 2022.

Equities weight % Bonds weight % Cash weight % Alternatives weight % Inflation-linked weight % Equities return % Bonds return % Cash return % Alternatives return % Inflation-linked return % Equities vol % Bonds vol % Cash vol % Alternatives vol % Inflation-linked vol % Equity–bond correlation Equity–alternatives correlation Risk-free rate % Inflation %

Weights: —
Expected return: —
Volatility: —
Diversification benefit: —
Sharpe ratio: —
Real return: —
A bad year: —
A 2008-style shock: —
What drives the risk: —

Move the equity–bond correlation from 0.2 to 0.6 and watch the diversification benefit shrink without a single weight changing. That move is what 2022 was. The "bad year" line assumes a normal distribution and is therefore the optimistic case — compare it with the shock line beneath, which makes no distributional claim at all.

The idea behind it

This calculator belongs to How to Think About an Allocation, where the mechanism it computes is explained step by step, with the formula, what each input means and where the simple model stops being right. Everything is computed in your browser; nothing you type is sent anywhere.

All calculators

Not advice. This explains how something works; it is not a recommendation, and nothing here is tailored to you. You can lose everything you put in — with leveraged instruments, considerably more. StrikeAndYield is not a regulated firm and provides no financial services.

The same in full — six points, and why each one matters

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Nothing here is tailored to you. This is written for a general audience. It does not consider your objectives, financial situation, knowledge, time horizon or tolerance for loss.
The examples are simplified. Worked examples use round numbers and leave out costs, spreads, taxes, collateral, settlement and market conventions that materially change real outcomes.
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