Faculty and Research - Research Projects - Challenges of Alternative Investments

Challenges of Alternative Investments

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Full title
Challenges of Alternative Investments

Project duration
36 months (01.01.2020. - 31.12.2023.)

Funding
Croatian Science Foundation

Project budget
371.700.00 HRK

Project manager
Full professor Zdravka Aljinović, PhD

Research group members:

  • Branka Marasović, Blanka Škrabić Perić, Ana Rimac Smiljanić, Tea Šestanović, Ante Toni Vrdoljak, Tea Kalinić Milićević

Project aims:

  • To investigate the correlation of the return of particular alternative investments, especially cryptocurrencies, with the returns of traditional as well as some other alternative forms of investment. 
  • To investigate the contribution of particular alternative investments, especially cryptocurrencies, in terms of Markowitz diversification; to find out which of the alternative forms of assets and in which proportions best contribute to portfolio performance, considering all recognized features and constraints.
  • To calculate and compare the risk of some alternative investments, but also for, and in comparison with, traditional forms of assets. 
  • To investigate if neural networks offer more accurate prognostic values of price and volatility of the selected cryptocurrencies, i.e. CRIX index in comparison to ARIMA models in the context of time series for modelling and forecasting prices of cryptocurrencies, and GARCH models for modelling and forecasting volatility.
  • To identify which neural network is suitable for modelling and forecasting cryptocurrencies’ price and volatility: to define the structure of neural networks, to compare the results of various neural networks, including feedforward and recurrent, and to implement the most appropriate neural network. 
  • To investigate the connection between institutions and alternative asset market as a separate segment of capital market, to investigate whether the role of institutions differs in developing and developed countries and for different types of alternative investment.
  • To link and explore the institutional environment and financial literacy with the development of alternative markets in developed and less developed countries.
  • To investigate the possibility of mutual causality between the alternative asset market and financial literacy.
  • To explore the link and influence of financial literacy on individual alternative investments.
  • To find out whether a more advanced level of financial literacy effects on participation in cryptocurrencies’ trading.
  • To study to what extent the development of the cryptocurrency market encourages participation in trading.

Key deliverables:

Project website (available in Croatian only)