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Can the Quantitative Diversity Index be combined with other portfolio optimization techniques to improve investment performance?

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Yes, the Quantitative Diversity Index (QDI) can be effectively combined with other portfolio optimization techniques to enhance investment performance. Research has shown that incorporating diversity measures, such as QDI, alongside traditional risk measures like Value-at-Risk (VaR) and Expected Shortfall (ES) can lead to improved portfolio optimization outcomes . Additionally, models that utilize entropy and mutual information instead of variance and covariance for risk assessment have demonstrated enhanced portfolio diversity measures, especially in terms of portfolio weight entropy, which can contribute to better performance . Moreover, techniques like dimension reduction and increased sparsity in the covariance matrix have been proposed to efficiently solve large portfolio optimization problems, resulting in improved optimizer performance while maintaining expected risk and return levels . By integrating QDI with these approaches, investors can achieve a more robust and diversified investment portfolio, ultimately enhancing investment performance.

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Open access•Posted Content Diversity metric for evaluation of quantum annealing. Alex Zucca, Hossein Sadeghi, Masoud Mohseni, Mohammad H. Amin - Show less +3 more 25 Oct 2021-arXiv: Quantum Physics 1 Citations	Not addressed in the paper.
Open access•Posted Content•DOI Efficient Solution of Portfolio Optimization Problems via Dimension Reduction and Sparsification 21 Jun 2023	Not addressed in the paper.
Open access•Journal Article•DOI Portfolio Optimization with a Mean-Entropy-Mutual Information Model Rodrigo Gonçalves Novais, Peter Wanke, Jorge Junio Moreira Antunes, Yongxian Tan - Show less +3 more 01 Mar 2022-Entropy 5 Citations	The Quantitative Diversity Index can be combined with Mean-Entropy models to enhance portfolio diversity measures, potentially improving investment performance through a different risk measurement approach.
Open access•Posted Content•DOI Diversification quotients based on VaR and ES 09 Jan 2023	Yes, the Diversification Quotient (DQ) based on VaR and ES can enhance portfolio optimization by quantifying diversification in stochastic portfolio models, improving investment performance theoretically and practically.
Open access•Journal Article•DOI The Quantitative Diversity Index in Multi-Objective Portfolio Model Seyed Babak Ebrahimi, mostafa abdollahi moghadam, Nasser Safaie - Show less +2 more 01 Jan 2021 4 Citations	Yes, the Quantitative Diversity Index can be combined with multi-objective portfolio optimization techniques, such as the model proposed in the research, to enhance investment performance by maximizing diversification and minimizing risks.

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