A method of dynamically adjusting sizes of cache partitions includes, for each cache partition, estimating a number of hits that would occur on the cache partition for a set of potential size increases of the cache partition and a set of potential size decreases of the cache partition. Based on these estimates, a determination is made for each cache partition, whether to increase the size of the cache partition, maintain a current size of the cache partition, or decrease the size of the cache partition. Cache partition size increases are balanced with cache partition size decreases to allocate the entirety of the cache to the set of cache partitions without over allocating cache resources and while optimizing a sum of total cache hit rates of the set of cache partitions. A set of data structures is used to efficiently determine the estimated hit increases and decreases for each cache partition.