Quantitative · Portfolio Construction

Why 20 Uncorrelated Alphas Beat One Great Signal Every Time

January 2026 · 7 min read · Atman Capital Research

Information ratio scales with the square root of the number of independent signals. Twenty signals with IR 0.5 each combine to an IR of 2.24. One signal at 0.5 stays at 0.5.

Twenty signals with IR 0.5 each combine to IR 2.24. One signal stays at 0.5. The mathematics are unambiguous.

The Diversification Imperative

Our Statistical Arbitrage Strategy runs 20+ uncorrelated alphas from independent data sources: order book imbalances, funding rate dynamics, cross-exchange differentials, options skew signals, and momentum factors across dozens of altcoin pairs. No single alpha is dominant — intentionally.

Cross-Venue Diversification

Correlation between our Binance and OKX strategy returns is ~0.4. Combining both smooths the equity curve significantly, delivering the mixed portfolio IR of 3.83.

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