Tue, Sep 2, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Two ways to generate alpha with risk management tools

Monday, August 12, 2013

Precy Dumlao, Opalesque Asia:

There are two ways to actively generate alpha with risk management tools, said Damian Handzy, Chief Executive of Investor Analytics, during the latest Opalesque 2013 Connecticut Roundtable.

The Opalesque 2013 Connecticut Roundtable was sponsored by Eurex, Investor Analytics and Taussig Capital and took place in June 2013 in the Stamford office of Federal Street Partner.

Handzy gave two examples, "One is that risk concentrates on the left tail, and we all know that the left tail is asymmetric with the right tail. However, the techniques of analyzing the left tail lend themselves to analyzing the right tail. The result is that firms are now looking at the causal relationships that make the tail fat – and on the flip side examining the causal relationships between the securities that will make the right tail, the gain tail, as fat as it could be."

He said that the second example to generate alpha with a risk management tool is when a hedge fund uses risk analysis techniques to identify the characteristics of trades that generate the most profit. Their intention, he said, is to do more of the trades that increase profitability and fewer of the trades that do not.

......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing Square, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the

  2. Comment – Why you should avoid the hottest hedge fund hands, Swedroe attacks Hussman over risk management, relative value strategy[more]

    Why you should avoid the hottest hedge fund hands FromCNBC/Yahoo.com: Investors who don't have money with Pershing Square Capital Management are likely salivating at the hedge fund's industry-leading 26 percent return from January through July. But investing with Bill Ackman and other to

  3. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest

  4. Ex-UBS prop trader's hedge fund Manikay Partners eyes UK launch[more]

    From eFinancialnews.com: Manikay Partners, a $1.7 billion US multi-strategy hedge fund set up in 2008 by a proprietary trader from UBS with backing from Goldman Sachs, is planning to open in the UK. New York-based Manikay's move into Europe comes after Financial News revealed on Monday that Aurelius

  5. Big hedge funds tighten grip amid consolidation[more]

    From Asianinvestor.net: The hedge fund industry consolidated last year with the number of funds falling by around a tenth from 2012 but assets under management rising $248.8 billion to $2.6 trillion, finds a new report from research firm eVestment. Firms with more than $1 billion in hedge fund A