The Tool That Lets You Test Whether Diversification Actually Works
Blend three systematic strategies any way you want and watch the drawdown chart change in real time.
What happens when you blend a global equity and income model, a pure tactical income strategy, and a large-cap momentum system? Equal-weighted, the answer is a 12.33% annualized return since 2010, a Sharpe ratio of 1.56, and a maximum drawdown of 9.80%. That last number is the one worth sitting with. The S&P has drawn down more than that in a bad month.
I have been obsessed with one idea for most of my career: a well-constructed blend of independent return streams should smooth the ride without giving up the return. Not because I read it somewhere. Because I built model portfolios in 2000 and 2001 that had to survive what came next, and the ones that survived were never a single bet dressed up as a strategy.
Today I am opening a tool that lets you test that idea yourself, with real numbers, in your browser, for free.
What it actually does
It is called the Blended Strategy Builder, and it blends the monthly returns of three of my live models: All-Weather Balanced, the Tactical Income Model, and the Jaguar Strategy. You move three sliders. The tool recalculates everything else in real time.
Blend weights. Equal weight, 60/30/10, 50/50/0, or your own custom split, normalized automatically to 100%.
Performance metrics. Annualized return, volatility, Sharpe, Sortino, max drawdown, current drawdown, year-to-date, one-year, three-year cumulative, best month, worst month. All recalculated the instant you move a slider.
Growth of $10,000, plotted against ACWI, AGG, SPY, or a blended 60/40 world benchmark, so you are never comparing your blend to a strawman.
A dedicated drawdown chart. This is the one that matters most and the one most tools leave out. Return charts sell the upside. The drawdown chart tells you what you would have actually lived through.
Calendar year returns, broken out year by year, because a 16-year Sharpe ratio hides more than it reveals.
A correlation matrix, monthly, over the full overlapping period. This is where the diversification claim either holds up or it doesn’t. I will show you mine below.
And an export button. The full blended monthly return series, as a CSV. Nothing is uploaded, nothing is hidden. If you do not trust a chart, pull the raw numbers and check my math yourself.
Which brings us back to the obsession
Here is the correlation matrix as it stands today, 198 overlapping months:
Jaguar Strategy to Tactical Income Model: 0.18
Tactical Income Model to All-Weather Balanced: 0.68
Jaguar Strategy to All-Weather Balanced: 0.50
Tactical Income Model to ACWI: 0.22
Jaguar Strategy to ACWI: 0.59
The 0.18 is the number I built this tool to show you. Jaguar is a large-cap momentum system running against the S&P universe. Tactical Income runs two separate income ETF universes. They are doing almost nothing in common, month to month, and that is the entire point of blending in the first place.
The 0.68 is worth naming too, not hiding. All-Weather Balanced and Tactical Income both carry income exposure, and in a rate or credit shock, that overlap shows up. I would rather show you the honest number than sell you a clean story that falls apart the first time someone checks it.
Some of this history predates live trading for each individual model. That is disclosed on the page itself, and the full monthly series is exportable so you can see exactly where backtest ends and live performance begins. A tool that only shows you the flattering chart is marketing. A tool that hands you the raw series and a correlation matrix is something closer to due diligence, and that is the standard I want this held to.
I am just getting started
I built this as the first module. Over time I plan to add carefully chosen additional return streams, not for the sake of more sliders, but because the value of this exercise scales with genuinely independent inputs, not with more inputs that all move together. The tool stays free to use. The underlying signals, the actual current positioning of these models, remain for paid subscribers.
You do not need my blend. That is the entire point of building this as a sandbox instead of a preset. If you are drawdown-averse, tilt toward Tactical Income and watch what happens to that -9.80% figure. If you want more growth exposure and can stomach the swings, tilt toward Jaguar and watch the correlation to ACWI rise accordingly. The tool will show you the tradeoff honestly, in under fifteen minutes, because you are the one moving the sliders.
Risk management should always be the top priority of investors. Now you have a way to test it yourself before you decide whose signals to trust.
Paid subscribers get the live, current-month positioning behind each of these three models, the actual signals driving the sliders, not just the historical blend.
P.S. The tool will have a permanent home in the main navigation bar.