Portfolio Rebalancing Strategy
When to Use
- •Portfolio becomes unbalanced (one domain >40% of total)
- •Domain underperforming significantly
- •Major market condition change
- •Quarterly review
Target Allocation
Default Balanced
- •DLMM: 25%
- •Perps: 25%
- •Polymarket: 25%
- •Spot: 25%
Conservative (Bear Market)
- •DLMM: 40% (stable yield)
- •Perps: 10% (reduced risk)
- •Polymarket: 30% (uncorrelated)
- •Spot: 20% (reduced exposure)
Aggressive (Bull Market)
- •DLMM: 20%
- •Perps: 30% (trend following)
- •Polymarket: 20%
- •Spot: 30% (momentum plays)
Rebalancing Rules
Trigger Conditions
- •Any domain >40% of total portfolio
- •Any domain <15% of total portfolio
- •Domain drawdown >20% from peak
- •Major market regime change
Execution
- •Calculate current allocation percentages
- •Identify overweight and underweight domains
- •Close/reduce positions in overweight domain
- •Open/increase positions in underweight domain
- •Target moves of 5-10% at a time (not all at once)
Domain Performance Assessment
When to Reduce Allocation
- •Win rate < 30% over last 20 trades
- •Drawdown > 15% from starting balance
- •Market conditions unfavorable for strategy
When to Increase Allocation
- •Win rate > 60% over last 20 trades
- •Strategy edge clearly working
- •Market conditions favorable
Cross-Domain Correlation
Low Correlation Pairs (Good for Diversification)
- •DLMM + Polymarket (different drivers)
- •Perps + Polymarket (different drivers)
High Correlation Pairs (Careful of Concentration)
- •DLMM + Spot (both affected by Solana market)
- •Perps + Spot (both directional crypto bets)
Checklist for Rebalancing
- • Current allocation calculated
- • Performance per domain reviewed
- • Market conditions assessed
- • Target allocation determined
- • Moves executed gradually (not all at once)
- • New allocation documented