Which factors are positively related to a wider corridor width in portfolio management?

In portfolio management, a wider corridor width typically refers to a greater range of acceptable returns or performance before making adjustments to the asset allocation. This wider corridor can be positively associated with higher transaction costs. When transaction costs are high, the investor may prefer to maintain a wider corridor to avoid frequent trading, which can erode returns due to those costs. By allowing the portfolio to deviate more from its target allocation, investors can limit the number of times they need to rebalance, thus saving on transaction costs.

This understanding is essential in practical portfolio management, as it reflects a balance between the costs associated with adjusting a portfolio and the investor's strategy. Keeping transaction costs in mind encourages investors to set a wider range for performance before taking any actions.