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Hedge Fund Strategies (Part 4) –Hedged Equity Market Neutral

Hedge Fund Strategies (Part 4) –Hedged Equity Market Neutral

Traders take positions in pairs of similar stocks, longing the “undervalued” one and shorting the “overvalued one”, thereby placing a bet on the ultimate outperformance of the long position.

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Copyright 2011 Eric Bank, Freelance Writer
Downside CAPM

Downside CAPM

We have devoted a lot of blog space in the past examining the pros and cons of the Capital Asset Pricing Model (CAPM). The model predicts the amount of excess return (return above the risk-free rate) of an arbitrary portfolio that can be ascribed to a relationship (called beta[1]) to the excess returns on the underlying market portfolio.

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Copyright 2011 Eric Bank, Freelance Writer
Behavioral Portfolio Theory 1 – Safety First

Behavioral Portfolio Theory 1 – Safety First

ur survey of portfolio theories continues; we have already evaluated Modern Portfolio Theory, the Capital Asset Pricing Model and the Arbitrage Pricing Theory in earlier blogs, and now turn to a series of articles on Behavioral Portfolio Theory (BPT).

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Copyright 2011 Eric Bank, Freelance Writer