JPMorgan’s Kolanovic Warns Risk Parity Could Boost Volatility

JPMorgan’s celebrated quantitative analyst Marko Kolanovic, straight off a year in which he successfully forecast market force disruptions that led to two significant equity market downturns and one rebound in 2015, says 2016 will feature some of the same issues with volatility targeting, risk parity and trend-following strategies operating in a low liquidity environment amidst volatile surroundings.

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Kolanovic: Fed withdrawal of the stimulus needle most difficult fundamental factor

In the bank’s “2016 Equity Derivatives Outlook,” Kolanovic notes that the most significant risk factor in the markets in the...