Evai Ratings Methodology

A User-Friendly Guide to Evai Crypto Rating

Welcome to our guide on how the Evai Crypto Rating system, works. This guide aims to give you a clear understanding of our methodology and how to interpret the ratings to make informed investment decisions in the crypto market as well as to get the maximum benefit from using Evai tools.

The Goal

The main aim of Evai Ratings is to create a crypto assets ranking system and a set of tools that help investors form their optimal crypto portfolios.

Understanding the Basics

What is Evai Crypto Rating?

Evai Crypto Rating is more than just a rating system. It’s a comprehensive tool that considers the unique aspects of the crypto market, such as high volatility and correlation among assets. By using advanced AI models, we provide ratings that help both novice and experienced investors make informed decisions. Evai Crypto Rating is a system designed to assign ranks to different cryptocurrencies from the best (AAA) to the lowest (D) that indicate how good is each given asset for inclusion into the optimal investment portfolio.

Automatic Rating Calculation

The ratings are calculated automatically, removing any human bias and giving holistic, real-time, whole-market visibility to the users.

Update Frequency

New ratings for all assets are recomputed every 1 hour.

How We
Calculate Ratings

The methodology involves a portfolio management approach. It doesn't just look at market cap but also considers how likely each cryptocurrency is to be in an optimal portfolio.

This is done by looking at 'Nested Efficient Frontiers' - a way of ranking cryptocurrencies by uncovering layers of potential investment quality. A combination of factors is taken into consideration including market capitalization, liquidity, volatility, expected returns, and others. We use innovative Artificial Intelligence to analyze these factors and determine the optimal portfolio, or the 'Efficient Frontier', for different levels of risk and return.

The Rating Process

1

Finding Efficient Frontiers

We start by identifying cryptocurrencies that form the most efficient investment mix - the ones offering the portfolio with the best return for the least risk.

2

Nested-Efficient Frontiers

Next, we look at the following best set of cryptocurrencies (apart from the top-performing assets, selected on the previous iterations), forming sub-efficient frontiers. Think of it like peeling an onion. The outer layer (the top-ranking cryptocurrencies) is removed to reveal the next layer. This process continues, ranking each following layer of 'nested-efficient frontiers' until all cryptocurrencies are ranked.

3

Ranking

Each cryptocurrency is then ranked based on its position in these nested-efficient frontiers levels. At this stage, an assets' ranking values are calculated and ratings' letter codes are assigned.

4

Outliers

When tracking ranks and ratings in time, one can notice for some assets, that they might rapidly jump up a couple of rank levels. This might happen due to a variety of reasons that are under early investors' interest if the rank grows.

The rankings letter codes are
defined as the following

IDLetter CodeDescription0AAATop-rated assets, best performers1AAExcellent assets with slightly higher risk2AGood assets with potential for growth3BBBModerate assets with balanced risk-reward4BBBelow-average assets with some potential5BLower-quality assets with higher risk6CCCVolatile assets with significant risk7CCAssets with increased risks and volatility8CHigh-risk assets with lower efficiency9DLowest ranked, not recommended for investment10UUnrated, usually new or lacking data

Conclusion

Evai Rating Methodology evaluates crypto assets by automatically calculating their ratings based on measurable factors. This system aims to assist investors in selecting crypto assets for their portfolios by considering cryptomarket-specific factors like market cap size, liquidity, slippage, investors' risk level, and assets' profitability. It also includes a concept called "nested efficient frontiers" to rank the whole universe of assets (not only the ones, that reside on the efficient frontier).

This approach offers a dynamic, data-driven method for investors to understand and compare crypto assets, catering to various investment strategies and risk tolerances.

网址：Evai Ratings Methodology https://klqsh.com/news/view/359223

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