Risk aversion took a back seat Thursday as investors sought the high-yielding Australian dollar after it took a huge beating in the previous session.

The Australian dollar climbed as much as 7% against the Japanese yen to hit a high of 72 yen and rose around 5% versus the U.S. dollar to touch a peak of $0.7105 late Thursday, as investors took heart from a slight bounce in Asian stocks following the coordinated interest rate cuts taken by central banks across three continents.

But Aussie dollar bulls who were calling for a parity party had to put their champagne bottles back in the cellar. In less than three months, the Aussie nose-dived to a five-year low earlier this week, after touching a 25-year high of $0.9850 against the dollar on July 15.

What is the best way to mitigate these sharp swings? “Low volatility baskets,” answers Ashley Davies, FX strategist at UBS.

His best recommendation -- hold a basket that is half filled with the Aussie and half filled with the yen.

“That effectively takes out the element of risk aversion, because the yen will appreciate when things are going bad and the Aussie will weaken. So these will offset each other,” he says. “(This) is very low risk… a low volatility basket, with some modest upside.”

Now, that’s one sure-fire way to avoid your investment from going up in ashes!

Catch "Protect Your Wealth" on CNBC's Asia Pacific network every Tuesday on "CNBC's Cash Flow," Wednesday on "Asia Squawk Box" and Thursday on "Capital Connection."

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