The NBA Finals are over and done, and being Chicago Bulls fans (a mandatory requirement to work at Attain), we were only too happy to see the Dallas Mavericks beat the Miami Heat (who had knocked our beloved Bulls out a round earlier). After much hullabaloo over the star power radiating from the Heat (not to mention controversy over the manner in which Dwayne Wade, Lebron James and Chris Bosh got together under one franchise), they still weren’t able to make it happen when it came down to the end. It appeared that the better team, the Mavericks, beat out the star power of the Heat.

So what does this have to do with managed futures? The whole team versus superstars theme reminded us of a Newedge Alternative Edge research piece entitled Superstars versus Teamwork. The piece tested a Heat-style portfolio of superstar managers (those with the highest Sharpe Ratio) against a Mavericks-arranged portfolio of managers that had low levels of correlation to one another. The result? We hate to sound like a cliché, but teamwork wins.

[past performance is not necessarily indicative of future results]

Turns out, between 1998 and 2005, the portfolio of team players had the highest overall Sharpe Ratio, which, arguably, indicates a better overall performance (past performance is not necessarily indicative of future results). The takeaway is that, theoretically, the best approach for portfolio development is to make sure you’re diversifying within your managed futures investment- not just relying on managed futures to diversify your overall portfolio (though that should be a goal, as well).

As for you Heat fans, we’ll leave you to nurse your wounds, but before we go…

Why didn’t Lebron go to college?

Because he didn’t want to show up for the Finals…