Things have been a little rocky in the cryptocurrency space lately. Hacks, market manipulation and investor sentiment have left some investors more than uneasy about their positions in crypto.

What did grandpa always say about putting all your eggs in one basket? Oh yea — Don’t.

There is one idea that will guide crypto investors through this tumultuous time and that’s Diversification. Diversifying your cryptocurrencies will protect your entire portfolio’s value.

Lets start from the top.

Comparing Crypto to Traditional Equities

Cryptocurrencies have emerged as a great alternative asset class in a complete portfolio. The correlation between bitcoin and the S&P 500 is -0.14. That means bitcoin, the leading cryptocurrency, is almost perfectly uncorrelated to the top 500 U.S. stocks.

Why is that good? Diversification works best when assets are uncorrelated or even negatively correlated. With most traditional assets being correlated to the U.S. equities markets (think the value of your home, bonds and even your job security), an uncorrelated alternative asset like cryptocurrency should not move with the equities markets. That means if the S&P 500 starts to nose-dive, your crypto assets will hold their value and smooth your overall portfolio’s loss.

Conclusion — cryptocurrency is uncorrelated to the U.S. stock market and provides great diversification to an complete portfolio of assets.

Comparing Cryptos to … Cryptos

How can you take your diversification to the next step? Zooming in, you can protect your cryptocurrency portfolio through the same principles of diversification.

While most coins are correlated to bitcoin which holds almost 40% of the market cap so a dip due to bad-actors like we’ve seen this weekend can’t be perfectly avoided, investors can manage losses by spreading out allocation to alt-coins. Take this simple portfolio:

Top 10 Binance Bundle

In this portfolio, investors get into these 10 cryptos in about one second with one-click. These large market cap coins could serve well as a starting point for further diversification into emerging alt-coins and new ICO offerings.